By Michael Henley, CFP®, CPWA®, CRPC®, RMA®

You worked hard to build your wealth. The question is: how do you make sure it becomes a blessing, not a burden? When trusts are set up with intention and purpose, they can empower your heirs rather than just enable them.

The Purpose of Trusts 

A trust is a legal construct that allows you to safeguard assets while managing how and when those assets are released to heirs. Trusts have a dual purpose: preserving wealth and leaving a values-based legacy. At their best, trusts do more than just pass on wealth. They pass on wisdom. They can reward good decisions and shape the values and habits of future generations.

The way a trust is set up can define its intent with an emphasis on discipline and accountability.

Understanding Different Types of Trusts

Trusts come in several forms, including a few that encourage responsibility. 

Discretionary Trusts give trustees flexibility to make distributions tied to heirs’ needs or behaviors. This can eliminate the sense of automatic entitlement. 

Incentive Trusts attach distributions to milestones such as graduating from college, landing a job, or other such benchmarks.

Spendthrift Trusts are designed to shield heirs from their own less-than-optimal financial decisions. The grantor names a trustee who controls the purse strings and decides when and how much to distribute. Creditors cannot access the funds inside the trust. They only reach the beneficiary once a distribution is made. This type of trust is an intelligent safeguard against impulse spending.

Finally, Generation-Skipping Trusts (GSTs) preserve wealth for grandchildren and future generations while reducing estate tax exposure.

These tools can be layered to reinforce your family’s goals and values. You don’t have to limit yourself to just one type of trust.

Avoiding the “Trust Fund Baby” Trap

It’s not the trust itself that gives rise to the “trust fund baby” stereotype; it’s often the lack of thoughtful structure behind it. When wealth is handed down without context or guidance, it can feel like an open tab rather than a meaningful legacy. That’s when entitlement, complacency, or even emotional stagnation can take root.

But it doesn’t have to be that way.

Think of a trust as a quiet teacher. A well-designed trust can support growth, not just spending. Instead of setting distributions based solely on age, consider tying them to meaningful life milestones such as graduating, starting a business, volunteering, or contributing to a shared family goal. These moments don’t just warrant financial support. They reinforce a sense of purpose.

Some families take it a step further by writing a mission statement or a letter of intent to accompany the trust. This personal touch gives future generations something to reflect on: your voice, your values, and your hopes. It’s a way to keep the “why” behind the wealth alive. Ultimately, a trust functions most effectively when it acts more like a compass than a checkbook.

Choosing the Right Trustee 

Creating a thoughtful trust is only part of the equation. The person, or people, you appoint to carry out its purpose plays an equally pivotal role. The best-designed trust can still fall short if it’s not guided with wisdom and care. That’s where the trustee comes in.

A trustee must have sound judgment to execute a trust’s provisions. A family member can serve in the role but may be swayed by conflicts or emotions. A professional trustee must possess the necessary background and experience to manage the trust from a neutral standpoint. Many families opt for a hybrid approach.

Teaching Financial Stewardship Early

Money lessons don’t have to wait for adulthood or even until a trust is created. Some of the most lasting financial habits start early, when kids are naturally curious and eager to learn. Explaining the basics in a way that connects to their world (saving for something they care about, earning money through small jobs, and discussing giving) plants the seeds for financial stewardship.

As they grow, those conversations can shift into more hands-on experiences. For example, some families choose to involve teens or young adults in helping manage a small account, something modest, but real. It’s a way to let them get their feet wet with saving, investing, and making choices they can learn from.

Never underestimate the power of the traditional family meeting. Gathering around the table to talk about shared goals, family values, and the “why” behind financial decisions builds trust and understanding. These moments often stick with the next generation longer than any number on a statement ever could.

A Legacy That Builds, Not Burdens 

A well-crafted trust does more than pass down assets; it passes down intention. It can reflect your values, your hopes for the next generation, and the lessons you want to live on. In that way, trusts become blueprints for legacy, not just legal documents.

At Brandywine Oak Private Wealth, we work closely with you and your estate planning attorney or our estate planning attorney to design trusts that align with your vision and your family’s unique story. If you’re ready to explore what that could look like for you, we’d love to talk. Call us at (484) 785-0050, email contact@BrandywineOak.com, or schedule a meeting online.

Curious what it’s like to work with us? Visit our client testimonials page to hear directly from the families we serve.

FAQ

What is the purpose of using a trust in estate planning?

A trust can help guide the process of how and when wealth is passed down. Beyond that, it can reflect a family’s values by encouraging responsibility, supporting long-term goals, and helping prevent financial missteps. Some trusts even tie distributions to milestones, such as education or career progress, reinforcing a sense of purpose.

How can parents help their children become financially responsible before receiving an inheritance?

Conversations can start early, well before a trust is ever used. Many families introduce basic money concepts to their children in childhood and build on them with real-world experiences as the kids grow. Some even give teens a role in managing a small account to practice making financial decisions in a meaningful, low-pressure way.

What’s the difference between a family member and a professional trustee?

A family member may know the beneficiaries personally but might find it hard to stay neutral in emotional situations. A professional trustee brings objectivity and experience, often with training in finance and fiduciary responsibilities. Some families prefer a blended approach, using both for added balance.

About Michael

Michael Henley is the Founder and CEO of Brandywine Oak Private Wealth, a private wealth management and registered independent advisory firm headquartered in Kennett Square, PA. Over the course of his 20-year career, Michael has been dedicated to helping wealthy individuals and families plan and manage all aspects of their finances and investments. With a passion for helping others look behind the curtain and understand the complex world of finance, he develops close relationships with clients as he helps them progress toward their financial goals. Michael loves to provide clarity and alleviate financial anxiety, help prevent families from overpaying in taxes, and give wealthy families permission to enjoy their life savings. He says, “No work is more gratifying than giving families outcomes to what matters most to them.”

Michael holds the CERTIFIED FINANCIAL PLANNER®, Certified Private Wealth Advisor®, Chartered Retirement Planning Counselor℠, and Retirement Management Advisor® designations. Residing in Chadds Ford, PA, with his two children, he enjoys outdoor activities, particularly maintaining trails on his property, hiking with his dogs, and being an actively engaged dad, always taking his kids everywhere. Michael’s latest hobby is tennis and he recently started ice skating to join his daughter Savannah. He can also be found moving logs to the firepit with his son Maverick on the tractor. Michael serves on the board of United Way of Southern Chester County and loves mentoring younger advisors. Great mentors helped him succeed, and he’s convinced that every leader needs to both have mentors and be a mentor. To learn more about Michael, connect with him on LinkedIn.

Brandywine Oak Private Wealth is a registered investment adviser. Registration does not imply a certain level of skill or training. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.