Saturday, October 25, 2014

How to Secure Your Children's Future

Instead of giving your money and other assets to your children outright, putting your wealth in trusts can provide you with a better way to keep your children’s inheritance protected and well-managed. The following ideas will explain how.

Protection from lawsuit - If your child does not receive all of his or her inheritance at once, there is less for creditors to reach if ever your child encounters a financial or legal problems. In fact, this could happen when they begin to pay the taxes that come along with the inheritance you are leaving to them. Trusts can keep your children’s inheritance free from the hands of unlawful creditors.

Moreover, you can choose to equally distribute your wealth among your children over time intervals. Depending on the terms that you are to set, you can leave a certain percentage of the estate when the child graduates from college, upon marriage and birth of a grandchild among others. These will all depend on your discretion.

Conditions on proper use of inheritance - Once you die, you will never know how your children are going to be spend your hard earned wealth. Contracts for trust funds give you the power to create conditions which have to be met by the beneficiaries before they could ever receive their share of wealth. For one, you can require a drug test or an alcohol test to make sure that they won’t be wasting their inheritance on these addictive substances.

Special needs trusts for disabled beneficiaries - Leaving an inheritance to a disabled child is one of the greatest concerns of some parents. Having a revocable or living trust will allow you to add provisions for the establishment of a special needs trust for any disabled child.

PS. I found this video to be interesting. Something to think about creating trust funds for your kids.