All loving parents are concerned with securing their children’s financial futures. To this end, many of them will set money aside to see to it. However, they also want it to be dispersed in the right time and in the best way. There may be concerns that the children will receive the money before they have the maturity to make sound financial decisions. Plus, some parents want the money to be available to the child only for specific and critically important uses, like for healthcare or education.
Trusts are an important part of your estate plan when you want to leave money to your children. They can be complex to establish and once they are it’s best to have someone provide administrative oversight of them. For these reasons it’s best to work with a trusts attorney who can create trusts that meet your needs and offer services for ongoing administration. The following are some of the benefits of creating trusts for your children.
Provides educational funds
Trusts can make funds available to your children and grandchildren and other relatives of your choosing. In the event of your untimely death some of these relations will need money to continue their education. The trust fund you have established will allow for this purpose. Thanks to your wise financial planning there will be money for tuition fees, books and other education related expenses. A trust is one of the best means of guaranteeing that your offspring achieve their educational goals.
You set the terms for dispersal
The trust fund money you set aside will be administered by your attorney. You can designate that it be doled out according to a variety of benchmarks. These could include reaching a certain age, achieving a goal like school graduation or meeting a life milestone like getting married or having a child. Your estate planning lawyer will make sure that the terms of the trust have been met before distributing the funds. This means that even though you are no longer here, your wishes will continue to be respected with regard to your financial gifts.
Protects your children from sudden wealth
Some people question why it’s more beneficial to set up a trust for one’s children than to simply let them inherit everything. They reason being that “they’re going to get it all anyhow.” The fact is that the benefit depends on the heirs in question. The difference might be slight in some cases, but in others it will be huge.
Suppose you pass away and half a million dollars is immediately inherited by your 18-year-old child. Will they have the maturity to make sound financial decisions and ensure their future? Or, will they spend the money you accumulated on luxury cars, electronics and the guys or gals who catch their eye. The answer will vary from case to case. But if you have any concerns, you can establish a trust that will parcel out funds in the amount and on the schedule you deem best. This allows you to protect your children from their own financial inexperience even when you aren’t here to guide them.
Teaches the importance of saving
Creating a trust for your children not only enables you to put money away for their future, but also teaches them an invaluable life lesson on the proper way to handle financial matters. They will learn the importance of saving money for the future from growing up in a household where this principle is put into practice. The financial wisdom you are imparting to your children will become increasingly critical as they grow older.
As noted above, if you are interested in establishing a trust account for your children or grandchildren you should work with an experienced trusts attorney who understands this area of estate planning. Meek Law Firm would be happy to assist you in creating and administering your trust. For more information, contact attorney Jonathan Meek today. Call (704) 848-6335 or use the contact form on the right of this page to schedule a consultation appointment.