As a parent, the primary goal of estate planning is making sure your children will be taken care of if you pass away before they reach adulthood. Grandparents and other relatives often wish to leave assets to younger family members as well. Since the majority of states don’t allow minors to directly inherit property in their own name, setting up a trust for them offers the ideal solution. However, there are some important considerations when determining how assets should be managed.
What to Think About During the Trust Planning Process
Before establishing a trust, there should be a clear understanding of what purpose it will serve. For example, is it going to hold assets for all your children or just certain ones? Is it meant to provide for their basic needs while growing up, or should the funds be saved until they’re older? Trust funds can be set up for a variety of reasons, such as passing on real estate, paying for college, minimizing gift taxes, or providing protection against potential creditors.
One of the biggest estate planning mistakes people make is setting up a trust and then forgetting to transfer assets into it. Assets need to be titled in the trust’s name to avoid probate and ensure they’re managed and distributed as you intended.
Therefore, once you know the purpose of the trust, you must determine how to fund it. This can be done through cash, real estate, or investments.
Having a trust will allow you to implement specific guidelines for how assets should be dispersed. You can choose when and how much a beneficiary receives.
Will they get a lump sum when they reach a particular age, graduate, or get married? Will they receive a set amount each month or year? You can also control how it’s to be spent, whether it’s for education, medical expenses, or buying a house.
4. Trustee Appointment
Selecting someone to take on the role of trustee is a key part of the planning process. This person will be responsible for overseeing how your assets are handled and distributed to beneficiaries.
As such, it should be an individual you trust to uphold the best interests of your children. They should also be reliable, organized, and financially savvy.
If you’re interested in creating a trust that benefits minor children, turn to Ibold & O’Brien for guidance. Serving Geauga, Lake, Ashtabula, and Cuyahoga counties and the surrounding Northeast Ohio communities since 1980, this trusted law firm has helped countless families prepare for the future. They have extensive experience in all aspects of estate planning and will ensure you have the right documents in place to execute your final wishes. Call (440) 285-3511 to schedule a consultation or visit them online to learn more about their services.