Benefits Of Trusts for Young Children
It’s difficult to argue that little is more important than providing for the needs of loved ones. And while nobody wants to spend time thinking about what would happen if they were no longer around, it’s crucial to have a plan to care for your children – especially if you’re a single parent or a grandparent caregiver.
What Type Of Trust Is Best For The Kids?
Trusts offer a lot of flexibility when it comes to caring for young children. For example, you can decide how to fund the trust, distribution payment dates, and payment purposes. You can also name a trustee – typically a family member or close friend – who will manage the trust on behalf of your children.
One of the critical benefits of trusts is that they can help keep your assets in the family. If you have small, growing children, you may be concerned about what would happen to your estate if you were to die suddenly. A trust empowers you to specify that your assets go directly to your children without going through probate.
Can I Withdraw Money From My Child’s Trust Fund?
When establishing a trust, you’ll need to decide whether it will be revocable or irrevocable. If you establish a revocable trust, you can change the trust agreement down the road. However, an irrevocable trust cannot be changed once established, so the trust structure stays set in stone. If provisions are set for you to withdraw, and you meet the terms, you may.
If you’re the trustee of a trust for young children, there may be times when you need to access the trust funds for expenses related to the children’s care. As long as you follow the trust agreement and use the funds for their intended purpose – usually for the children – you should be able to withdraw money from the trust as needed.
The leading advantage of a revocable trust is that it allows you to make changes as your children grow older. For example, you may want to change the trustee or beneficiaries if your children’s needs change or the named trustee cannot perform their duties.
What Are The Disadvantages Of A Trust?
One of the primary disadvantages of a trust is that it can be expensive to set up and maintain. You will likely want to work with an attorney to draft the trust agreement and file the legal paperwork with the state. You may also need to pay annual fees to keep the trust active.
Another downside of a trust is that it can be complicated to manage. If you’re uncomfortable handling administrative duties, you may consider hiring a professional trustee.
Is A Trust For My Children The Right Decision?
Whether or not to set up a trust for your children is primarily personal. You must consider your financial situation, your children’s needs, and your comfort level with trust management. However, if you have young children, have the means, and want to ensure they what they need if something happens to you, a trust is an excellent solution.
This article was brought to you by Heban, Murphree, & Lewandowski LLC, a probate law firm focusing on estate litigation, wills, and trusts.