Today’s blog post may seem dark, but it is a way for children to be covered financially in the event they become orphaned. Once an orphaned child gets the insurance money what should they do? Today’s blog covers that by highlighting the need for setting up a trust.
A primary benefit of doing this is so that the assets are held for the child, and protected from legal claims. Any assets that you have are subject to seizure creditors. However, assets held in trust are legally protected. Setting up a trust will protect them, much as they would be protected through estate planning.
A big benefit of setting up a trust for your child, is that you can ensure the funds will be available for years to come. Money can be distributed monthly, quarterly, semiannually, or annually. It can even set it to be dispersed when the child reaches a certain age, say 25, 30, or even 50 years old. This allows you to delay turning over the assets to your child until they reach an age at which you believe they will be financially responsible.
Another benefit of setting up a trust is that you can ensure money is used for intended purposes like college education, buying a home or medical expenses. It guarantees that funds will be available during your children’s time of need, as well as when they are adults. You may not be there to provide the funds, but the trust fund will help take care of them in your absence.