A trust fund is an effective tool to preserve assets for your minor children. It is important to review the details with an estate planning lawyer who can provide guidance on how to set up a trust fund or a minor’s trust. Your attorney can draft the document accordingly for the protection of the beneficiary.
Why Set Up a Trust Fund?
There are a number of benefits to setting up a trust fund. It is an effective way for you to organize your assets and ensure your minor children have long-term support. Trust funds are a good idea for a variety of reasons, including:
- Avoiding probate.
- Trust funds protect assets from minors who may not approach an inheritance with common sense.
- Trust funds help ensure responsibility by putting conditions on asset distribution, such as getting a college degree.
- Trust funds are not limited to being funded with your own money and assets. Friends and family members can contribute to the trust account as well.
Your decision to set up a trust fund will depend on your own objectives. An attorney can help you identify your objectives and tailor your trust fund to fit your financial plan for the future.
What Steps Should You Take?
When you set up a consultation with an attorney, the attorney will let you know how to prepare for the consultation. Your attorney can get certain legal documents together for creating a trust, but you need to have a clear idea of how you want the fund to work.
- Select a trustee. This is the individual who will be the caretaker of the trust’s assets and abide by its key provisions, including use and withdrawal of funds. Some people choose someone from their bank to be the trustee. Others choose a trusted loved one. The decision is up to you.
- Transfer funds into the trust. You have to decide how much of your assets will go into the trust, and how frequently those assets are distributed to the beneficiary. Typically, personal property, like a family heirloom, is not included in a trust fund, but you can discuss that issue in more detail with your attorney.
- Distribute copies of the trust. If the child’s guardian is not the trustee, that guardian should receive a copy of the trust.
Your attorney can speak with you in more detail about the tax implication that creating a trust may have for you and your family members, both in life and upon your passing.
Where Can I Learn More?
Estate Planners of Arkansas, P.A. can answer your questions about how to set up a trust for a minor or a living trust for other purposes. Call us today to request a free consultation at (501) 414-8965 and see how we can help you.