Estate planning helps you and your loved ones attain more peace of mind for the future. If you wish to leave funds to your children or other heirs in case of your death, you may want to set up an education trust for them. Here are some things you should consider about an education trust.
Setting up an education trust to cover costs
Trusts are one of the ways you can leave relatives or non-relatives money to be used for education when they come of age. Funds can be allocated for tuition costs and living expenses.
There are a variety of choices here. Funds can be set up that only deliver money if school is attended. If your kids, grandkids or other beneficiaries do not attend school, they don’t receive the funds. If you are concerned that the inheritance you leave may be spent on items you don’t wish to support (vehicles, credit card debt, traveling) than setting up an education trust is a more specific option that will ensure the money goes where you want and it will also serve as an enticement for the potential recipients to continue their schooling.
Skip probate hassles
If you redistribute your wealth and keep certain items out of your probate estate, you may be able to avoid the numerous privacy concerns and costs associated with traditional probate.
Setting up an irrevocable life insurance trust is one of the most common tax-savings trusts to set up. Upon your death, life insurance policy proceeds regarding the death benefit amount are re-deposited back into your estate. This can transform an estate that is not subject to federal estate taxes into one that ends up owing the IRS money. The flaws in this system are obvious.
Establishing an irrevocable life insurance trust acts to shelter life insurance death benefit proceeds from being taxed by the estate. Once this trust is set up, life insurance is still active. Beneficiaries can receive policy proceeds after your death without worrying about estate taxes. This can free up extra money that may also be used for education purposes.
The gift that keeps on giving
Leaving your loved ones money to further their education will help them carve out a life for themselves. So many graduates are inundated with debt upon graduating. They often have to take mediocre jobs while attaining relevant work experience to secure their career. Setting up a trust to cover their expenses will not only pay for their advanced schooling but it will also allow them to enter the workforce with far less or possibly even no debt. This is a major burden lifted for young graduates just getting started in the world.
Choose an attorney who specializes in estate planning
Protecting your assets after you are deceased is one of the main reasons estate planning is so vital. Speak with a reputable lawyer who specializes in setting up trust accounts for covering educational costs and more. They will be able to discuss the benefits and the things to be aware of when drawing up your legal documents.
Share your plan with loved ones
While some may prefer not to discuss the details of their estate planning, it is often a wise idea to let those who are involved know your plans before it is revealed in your will. This can provide a delicate platform for discussing your wishes while you are alive and answering any questions or concerns your executor or family members may have.
The goal of financial planning is to achieve peace of mind and have a checklist to follow in the event of your death. Discussing options and sharing your wishes during your lifetime can be an informative part of your decision making process.
Attorney Jonathan Meek has helped many individuals with their estate planning needs and he is ready to assist you as well. Contact him at Meek Law Firm today to discuss your options. Call (704) 848-6335 or use the contact form on the right of this page to schedule a consultation appointment.