Practical Considerations – Trust Planning
I want to leave my children enough so that each child can do anything he wants,
but not so much that he can do nothing.
If you want to provide for your children in your Will, but don’t want to give them carte blanche access to their entire inheritance on day 1, give these considerations some thought when planning trusts for your children:
- What are you trying to accomplish with your trust? Are you trying to encourage certain characteristics (e.g. compassion, productivity, happiness, etc.?) or trying to set financial expectations?
- What type of expenses would you pay for if you were alive? (e.g. college, downpayment for first home, seed money for business venture, travel abroad, other?)
- What do educational expenses mean to you? lodging? books? tuition? study abroad? graduate school? activities? fraternities/sororities? extended undergraduate? other?
- Would you allow distributions after college/graduate school to supplement income or is it important to you that your children have their own income before they receive trust distributions?
- What if your child has young children? Would you allow distributions to grandchildren while your child is still alive?
- Is it important to you that your children work or are other non-paying activities, such as volunteer or charitable work, sufficient?
- Do you want to allow the guardian of your minor children to receive money for general support directly or have them request funds from Trustee for your children’s health, support, education and maintenance?
- Do you want to allow the guardian of your minor children to access funds from your children’s trust to support their minor children? If so, what are the parameters around that distribution? Would you like to provide a new home for the guardian and your children and their children?
- Are you passing a business to your children? Do you want them to be active participants or simply receive a share of the assets?
- Are you trying to leave a legacy for your children or just enough so that your children have opportunities to create his own legacy?