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A trust can help protect your children

On Behalf of | Mar 5, 2021 | Trusts

When you make your estate plan, it is important to remember that life can be unpredictable. You cannot rely on the fact that you will live to a ripe old age. Consider if your children would be mature enough to handle their inheritance if you died within the next few years? If not, there is a real risk they could lose everything you leave them within a short time. They could also do themselves considerable harm in the process if they spend it on fast cars, alcohol or drugs.

Trusts help your children manage money

One estate planning tool you could use to protect your children is a trust. It can help your child manage the money you leave. A trustee is appointed to manage the trust on their behalf. Here are some benefits:

  • You can stipulate an age at which children receive assets: Many people set up their trusts so that children will not receive money until they are 18, 21, 25, or even older. While a child is officially an adult at 18, they still are very young to manage large sums of money.
  • You can decide what the money is used for: If you want to ensure your child gets a good education, you could separate a portion of funds into a trust to pay for it. You could do the same to ensure your grandchildren get a good education.
  • You can drip feed funds: You can set up the trust to provide your children a monthly or yearly allowance rather than releasing funds to them in a lump sum.

Trusts are just one aspect of estate planning you might want to consider. Once you make your estate plan, you should revisit it regularly. As you get older, you can adjust things to account for your children’s increased maturity and changed circumstances.