Leaving too much, too soon, to young beneficiaries
Young adults who inherit wealth often lack the judgment to make responsible decisions with their inheritance, according to Mr. Behrendt. The “danger zone,” he said, is often for those in their late teens and twenties.
They could, for example, use the money for drugs or alcohol abuse, may be vulnerable to scams and fraudsters, invest too aggressively, or drop out of college.
“There’s no limit to the bad things that can happen,” Mr. Behrendt said. “You have anyone with a vulnerability to doing harm to themselves, you’ve just given them a loaded pistol.”
Parents should create a trust controlled by a trusted family member or a corporate trust company until beneficiaries reach a mature age, perhaps 30 or 35 years old, he said.