More and more, wealthy parents in Florida and elsewhere are putting a lid and a lock on the cookie jar. Their feeling is that the notion of handing large inheritances to their children at the age of 21 is no longer a wise decision. Instead, families are deferring the transfer of those assets until the kids reach their 30s and even 40s. What's more, when the inheritances are finally made, they often come provisionally as parents try to guard against profligate spending and loss of the family fortune.

Studies indicate that wealthy parents generally believe that financial maturity is difficult to achieve before the age of 35. There are a number of devises available to help parents ensure that the money they have accumulated will not wash out with the bath water. Trusts are growing in popularity as a means for keeping a hand in things to determine when and under what conditions the assets will be distributed.

A Florida couple wanting to take advantage of current gift tax exclusions opted to transfer $10 million to an inter vivos trust for their daughter's benefit rather than gift it to her outright. This not only keeps the couple in control of how the money is distributed, but also protects the fund in the event the daughter gets divorced.

A testamentary lifetime trust allows the distribution to be made under the terms of a last will and testament. However, the terms of the trust allows the parent to make changes during his or her lifetime. It can also stipulate how and under what conditions the principal and interest will be paid to the beneficiary.

GRATS (grantor-retained-annuity-trusts) and intrafamily loans are other methods of accomplishing financial goals for the wealthy, allowing them to make transfer that take advantage of applicable law while retaining power to make decisions that ensure protection of the asset. Finally, the best defense is said to be education. The earlier those children are brought into the discussion about family finances the better it may be for all concerned. Many observers believe that an attorney experienced in estate planning and trust formation may be a valuable tool in addressing wealth management within the family.

Source: Barron's Penta, "Holding Back the Inheritance" Tatiana Serafin, Dec 03, 2011