If you know the basics of estate planning, you will be aware that the sole use of a will is often not the most efficient way to distribute assets at the end of your lifetime. Assets mentioned in a will shall go through the probate process, which is not the most cost and time-efficient way to distribute your wealth.
This is why many people decide to hold a significant portion of their wealth in a trust with a named beneficiary. This helps to avoid the probate process and streamlines the ease in which your assets will be distributed to your loved ones. If you want to set up a trust for your children, you should consider the following.
Think about the maturity of your children
The way that you expect your children to develop in the years to come should help you to tailor the trust toward them. A teen may not make wise choices if they inherit a large sum of money in its entirety. Therefore, you should think about setting a date in which they would inherit the funds. You could also create an installment plan so that the funds can be distributed over several years.
Consider creating separate shares
If you have more than one child, you will probably want to divide the trust into several shares so that each child has their portion. This is possible to do in a trust, and it means that each child can take the money as needed.
There are many possibilities to personalize a trust, and this is why trusts are so popular for those thinking about their child’s inheritance.