A trust fund for your child is one of the best financial decisions you can make for them. It secures their future, and you can use the money for something meaningful rather than spending on less essential things. Trusts make sure that only your children receive the assets at a particular time in their life.
There are many benefits of setting up a trust fund. A lot goes into estate planning, and a trust fund is one of the most important parts. However, it can also be complex to understand the legalities. This is where a Cherry Hill estate planning counsel can help you.
Benefits of setting up a trust fund for your children
- There is a surety that the funds are kept for your children.
One of the fundamental benefits of creating trust in Cherry Hill is that the assets in it are free of legal claims. Besides retirement savings, any other assets you have are subject to seizure by the court. However, trust funds remain protected. Suppose if you are ever forced to file for bankruptcy, you won’t have to worry about losing all your assets and not having anything left.
- There is less confusion.
When you set up a trust for your children, you must clearly state which child gets which asset. This is mandatory in creating a trust fund which helps prevent arguments and disputes later. Since everything is already written in a legal document, there are likely to be fewer arguments.
- You can revoke or not revoke them, as per your choice.
There are two types of trust funds for children- revocable and irrevocable. As the name suggests, you cannot change or retain control over irrevocable funds until your children reach a certain age. This also helps ensure that the assets stay protected. On the other hand, revocable trusts are those which you can retain control over anytime you time. However, this makes them subject to seizures by creditors and the court.
- You decide when your children should receive the money/assets.
Giving a lot of money to minor children will do more bad than good. Trust funds ensure that your child can only access this money when they are of a certain age and not before that. This makes sure that the objective of setting up the trust stays intact. You want your children to benefit from this money and not ruin their lives by spending them on useless things.
- You can safeguard the money.
Once you create the trust and name the beneficiaries, there is no going back. You can include your children as beneficiaries and exclude them if you want, and your desires will be carried out when they reach a certain age. Therefore, this ensures that the money is safe and goes to the people listed in the trust.