One of the main goals of estate planning is to secure your family’s future, especially when you are no longer around. There are many legal instruments to help you achieve this goal, but trusts are the most common and most effective.
If your children are still minors, here’s how a trust can help safeguard their future—and what you need to consider before making one.
A trust helps you distribute assets according to your wishes
A trust can give you full control of when and how your children will receive the assets designated to them. For example, you can include a provision stating that your minor child will only receive their inheritance once they turn 21.
Many parents also use milestones as provisions. For instance, you might want the trust to release funds to your child when they graduate, get married or have children.
Setting up a trust can help you support your children as they grow older, even when you’re no longer alive. Moreover, provisions can make sure your children have the financial maturity and proper judgment to utilize your assets responsibly.
You can protect your assets from other relatives
It is not uncommon for family members to mismanage assets from an estate, even if their intentions are good. If this happens, there may be little to nothing left for your minor children once they become old enough to manage their own finances.
A trust can help you avoid scenarios like this. You can name a trustee responsible enough to manage your assets until your children can do so themselves. Furthermore, you can give your trustee the power to control distributions, which can make it more difficult for other relatives to claim entitlement.
You can continue parenting your children in some way
As a parent, you may worry about how your children will grow up without your guidance. Fortunately, a trust can help you parent them—to some extent—after you are gone.
As mentioned, you can set up specific purposes for distributions. A common example is disbursing money for meaningful improvements to your child’s life, such as a college education or a new business. So, in a way, you will motivate them to become better people, like you would while you are alive.
Trusts are powerful instruments for protecting generations of families. If you want to secure your children’s future better, consider speaking to an estate planning attorney who can help you start the process.