Benefits of Setting Up A Trust Fund for Your Children

When you have kids, you know that one of your biggest concerns is making sure that they are well taken care of throughout their life. If you have saved up money throughout your lifetime, you are probably considering leaving it to them to use in adulthood. While many people choose to just leave things to their children in a will, creating a specific trust fund for this purpose may actually be the better option. Here’s why.

Trusts allow you to specify what your children can use the money for.
There are many different types of trusts you can use to allocate money for your children, but most of them allow you to stipulate that they money be used for certain things if you wish, such as education, health care, or living expenses. You can also specify that they get access to the money once they reach a certain age. Many parents find that they are more comfortable leaving large sums of money to their children if they know what it will be used for, which makes a trust fund an ideal solution.

Trusts do not have to go through probate.
One of the biggest problems with leaving money to your children in a will is that they’ll only get access to it upon your passing, and even then, it will still have to go through probate, which can potentially take a very long time. This means that your child may not get access to their money when they need it. By leaving your money to your kids in a trust, you can prevent it from being tied up in legal obligations.

Many trusts avoid estate taxes.
In many cases, money that is left to children in a will or other estate planning tool is subject to taxes, which can be quite costly and take a good chunk of money out of your child’s inheritance. However, there are several kinds of trusts that can be created to avoid estate taxes, so you can save more of your money for your children.

You won’t have to worry about your children after you’re gone.
Since the money from the trust is managed by a trustee under your stipulations, you can ensure that your children will be safely taken care of throughout their lives. Setting aside money to pay for their education or other important parts of their lives can really ease your mind.

You can also use trusts to transfer stock or real estate titles.
If you have additional assets that you would like to give to your family, a trust is a very easy way to do that. If you want your children to have access to one of your family properties, it is fairly simple to do that by placing the deed to the property in the trust. You can also do this with a variety of different investments, which is a great way to continue growing your wealth as it is in your trust.

If you want, you can also use trusts to give your money to charities.
Trusts aren’t just useful for giving money to children – they can also be used to give money to charities or causes you believe in. This is a good option if you would like some of your net savings to go to a charity, but you aren’t sure exactly how much you want to give, or there are certain conditions that you would like to be met first.

Setting up a trust may seem intimidating at first, but it is actually fairly simple in most cases. To get started, talk to a lawyer who offers estate planning services to help you through the necessary paperwork.