It is not easy to imagine anyone else raising your children. After all, you gave birth to them, taught them to walk, fed them, dressed them, loved them, and promised always to be there. You are their parent. You make every important decision when it comes to your child. But as every parent knows, there could come a day when you are not around anymore. Even with grown children, we still want to protect them from the outside world.
This is where trusts and making even wiser decisions for our children come into play.
A common thread throughout my book, Who Gets Your Stuff When You Die, is the critical benefits trusts can offer for your peace of mind and your family’s future in the event you die or become incapacitated. This includes having a plan in place for your children that not only says who will step into your shoes as a parent but also protects stuff after it is theirs, whether they are minors or adults, responsible with money or not, healthy or disabled, married or single, etc.
The All-Important Trust
We all know that trusts let you decide how you want your stuff divided and transferred to your chosen beneficiaries. But it is becoming more common for us as parents to choose more customized approaches to make even wiser decisions for our children. If you have children, a trust can be set up to do any of the following:
- Protect heirs from unwise spending
- Protect inheritance from divorce, lawsuits, creditors, and bankruptcy
- Answer any questions related to long-term and lifelong care
- Ensure all money and assets remain with family
- Leave some assets based on the individual preferences of the recipient
- Specify distribution instructions so that money is available over time or at a specific age
There are a variety of trust types that help us make even wiser decisions for our children. Supplemental Needs Trusts and Heritage Trusts are two in particular that have to do with children and account for several of the bullet items above.
Supplemental Needs Trusts
Parents may set up and fund a Supplemental Needs Trust for a child with a disability who relies on government programs for long-term medical needs and assistance with daily living. A trust like this protects the child’s inheritance from outside factors, thus supporting the child’s other needs and ensuring a better quality of life. Some of the items it can provide for are:
- Special equipment
- Travel costs associated with medical appointments
- Additional medical care
A Heritage Trust can limit the money so that it only benefits the family. In other words, it makes sure the money you leave behind goes to the grandchildren rather than your child’s spouse. If the money were left to a son or daughter without a trust, the son or daughter would likely leave it to their spouse. The “in-law” could then remarry, and if that happens, it is possible that the money would end up in the hands of a stepparent rather than being left to the grandchildren of the original donors.
We can design a Heritage Trust that protects even the least capable and responsible children as well as the wisest and most mature. If the child is mature enough and responsible, they can be named their own trustee and have access to the money yet still be protected from the outside world.
The bottom line is that while we cannot control every aspect of our children’s lives, we can make wise choices that positively affect their lives when we are gone. That includes naming the people we wish to raise them, providing funds for the rearing of our children, and saying who should manage it.
Call Leigh Hilton PLLC today!
As parents, we must take a sober look at what we can do and what we should do when it comes to passing assets to our children. It is not just a matter of either giving or not giving. There are options for how we give. There are also consequences, if we do not plan ahead. The choice is really up to us.
A competent estate planner familiar with wills and different kinds of trusts and benefits is a valuable partner. Please call Leigh Hilton PLLC so that we can help ensure your children are taken care of in the best way possible.
Leigh Hilton PLLC wants to be your first call every time for any estate planning need. We look forward to serving you.
Thanks for reading!