If your children are younger than the age of age, it is worth considering how you would like to pass on your assets. Because trusts are growing in popularity, this article reviews some of the important issues that you must consider if you are considering creating a trust for your children.
# 1 – There Are Associated Costs
There are several hidden fees associated with trusts. If you do select this option, you will need to appoint a guardian who will oversee assets for the child in case something happens to you before the child reaches the age of 18. A trust guardian must be bonded and must routinely file paperwork with a court of law, which will likely require the assistance of an estate planning lawyer.
Funds from the trusts will be used to pay this amount. Despite these costs, many people discover that trusts are a powerful option because they protect assets.
# 2 – There Are Other Options
There are several unique ways to structure trusts, and what works best for you will depend on many personal factors. Instead of creating a trust before you pass away, it might be possible to direct that a trust be created for each of your children at the time of your trust. To save on costs, you might even state that a trustee not post a bond or file an accounting with a court on a routine basis.
Regardless of how you structure your trust, it is a wise idea to remember that creating a trust for children is often easier and less expensive than directly transferring assets to children.
# 3 – Trusts Are a Wise Idea for Adult Children Too
Even if you anticipate that your children will be over the age of eighteen at the time that you pass away, trusts can still be a powerful way to pass on assets. This is because assets that are placed in trusts can remain protected until a child reaches a certain age or satisfy certain conditions demonstrating financial responsibility.
Some parents even decide to have trusts continue for the lives of children so that assets in the trust remain protected from the child’s creditors.
# 4 – Trusts Are Flexible
The terms of many estate planning documents including wills are hard and fast but trusts offer a great degree of flexibility. The party that you appoint to oversee the trust can be granted great discretion in determining how distributions are made to children.
Some parents even decide that children will become co-trustees once they reach a certain age. This gives a child great discretion over how assets in a trust are controlled.
Speak with a Knowledgeable Estate Planning Attorney
If you decide to pass on assets to your children, it is important to consider all of the various complications. It can also help to retain the assistance of an experienced estate planning attorney.
Contact Ettinger Estate Planning today to schedule a free case evaluation with a seasoned estate planning lawyer.