Need to set up a trust for your child right now? As a parent, it is good for you to create a plan for distributing your assets in the case of your untimely passing. Part of that involves setting up a trust for your children. In a trust, you can choose a trustee who oversees such assets on behalf of your minor children until they reach a given age (often over age 18).
How do you set up a trust fund for your child with the help of a living trust attorney? Below, we will go over the general steps to establish a trust for your minor children so that you can plan accordingly and feel peace of mind about your children’s financial future.
How to Set Up a Trust for Your Child Right Now With a Living Trust Attorney
Setting up an inheritance trust fund starts with selecting a trustee as we mentioned above. A trustee will be in charge of your assets (money and/or property) until your child is of age. Since they will be responsible for your assets, be sure to choose someone you trust and know well. Consider:
- Is this person good with money?
- Will they make sure my children are taken care of?
- Can I count on him or her?
Many people choose a family member to oversee trusts. In many cases, this works out, but it is important to remember that just because someone is a loving family member does not mean they will automatically be the right person for the trustee position. Consider a trustee who has their finances in order now so that it will be one less thing to stress about, and you will know that your children will receive their trust when you pass.
Sometimes, a person may elect two trustees so that all of the burden is not on one family member. You can make one of these trustees the bank if you wish to keep them impartial in case you fear any problems within the family if you are no longer around to mitigate.
After deciding who will oversee the trust, you can work with a living trust attorney to decide when your children should receive the assets. Often, assets are distributed over a series of years–not all at once–to keep your children from spending everything at one time. With a lawyer’s help, you can figure out the best timeline to distribute your trust to your children, along with how it should be split up among your children (AKA beneficiaries).
Next, your attorney can put together the physical trust and advise you on how to transfer your assets there. This process can be complicated and have a lot of moving parts, which is why we recommend retaining an experienced attorney who specializes in estate law.
Trusts aren’t Just for the Very Rich
Contrary to popular belief, many families have trusts–not just those who have a lot of money. Any family who has property or assets can set up a trust for their children.
Perhaps, you have a family home or heirloom that is worth a lot of money. If so, you probably want your children to receive this home or item upon your passing, and you would like to verify it is done the legal way so that there are no issues within the family. Those are great reasons to establish a trust. A living trust attorney can ensure the disagreements are limited by putting together a trust alongside your will, which outlines your wishes in detail.
You Can Put More than Money into a Trust
Money is a common asset that goes into trusts. However, that is not all that you can add to your trust. Trusts can also include any of the following:
- Stock and bond certificates
- Cars
- Land
- Animals
- Fine jewelry
- Life insurance
…And more!
There are few limits to what you can add to your trust. If it has value to your family, it is likely fair game. Talk to your attorney to see whether your assets are available to add to your trust and be passed down legally to your minor children when they reach a specific age.
Advantages of Putting Assets Into a Trust
There are many reasons to include assets in your trust. For one, it will prevent anyone from accessing the assets, and it will ensure that the only person who is entitled to them is your beneficiary (or your trustee–until your beneficiary is of legal age).
This is vital for your estate and tax planning, and it can help you avoid unnecessary costs. It can also save money on taxes and save time in probate court. When you have a trust, your beneficiaries and trustee may bypass probate completely.
At any point, you can take assets out of your trust and add new assets into it. It is necessary to review your trust often to ensure it is up to date with the correct assets. While you are on it, think about whether you would like to make any changes with your trustee (e.g., if you chose a former friend, and you no longer have a relationship).
Contact us today to help you set up a trust.
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