Parents who worry about leaving their children behind when they die can prepare in advance. They can create estate plans that name guardians to protect their children. They can also protect their children by naming them as beneficiaries in wills or trust documents. Minor children are subject to the authority of their surviving parents or guardians. Their inheritance could be at risk.
Therefore, many concerned parents choose to fund a trust to preserve resources for their children in case they pass before their children reach the age of majority.
How does a trust help?
A trust creates a degree of separation between the guardian or surviving parent and the resources intended for the children. The trustee manages the resources and makes distributions as necessary. The trust can include restrictions on the distribution of resources.
In fact, the trustor can require that the trustee make direct payments to educational facilities, health care providers and other approved payees instead of distributing funds to the guardian or parent.
Trustors can leave explicit directions prohibiting the distribution of property from the trust until the children become legal adults themselves. In cases where there is reason to worry about surviving parents or caregivers squandering an inheritance, creating a trust can help ensure children have resources when they become adults and begin establishing their lives.
Working with an attorney to create and fund a trust can be a smart move for parents who worry about their children’s futures. There are many kinds of trusts and means of funding available. Parents who want to ensure that their children have support if anything happens to them may find that trusts are the best tools for providing for their children accordingly.