Setting up a trust for a child is one of the most important things a parent can do. As a parent, you want to make sure your kids are provided for. If something happens to you, you need to make sure money is set aside for your children’s education and so their new guardians can support them. You need to make sure this money is carefully managed. Even when your children are older, you may want to give them a financial gift and a trust may be the best way to do it.
If you are considering setting up a trust for a child, you need to be sure you have chosen the right type of trust. You also need to follow all formalities required to ensure the trust is legally valid. Parman and Easterday provides help to parents in Kansas, Missouri and Oklahoma.
Why is Setting up a Trust for a Child Important?
Setting up a trust for your child is especially important if your son or daughter is under the age of 18. Every parent wants to be there to provide for their children and see them grow up. Unfortunately, sometimes this isn’t possible. If something happens to you, you need to make sure you leave money for your child’s care.
Leaving money to your child by making a gift in your will is usually not the best approach. A child under 18 cannot manage the money on his own, so someone would need to be appointed as guardian for the money. Unless you’ve made plans for this, the court will appoint someone during guardianship proceedings — which can be costly. The court will also provide continued involvement and oversight, which adds unnecessary expense and makes it more difficult to take care of your child.
Unless you have made other provisions, the guardian of the assets will only manage the money until the child is 18. This means your child will be given his or her inheritance when he or she is probably too young to handle the money responsibly.
If you establish a trust instead of just leaving a gift in a will, you have much more control over what happens to the money and how it is used for your child. You name a trustee to be in charge of managing the funds and who has a fiduciary duty to make sure the funds are used for the child’s benefit.
You can also provide detailed instructions for how trust funds are to be used, and make sure the child does not receive all the money on his or her 18th birthday. You can create conditions, such as requiring your child to graduate from college to receive the money, or you can specify that the money is to be used for a specific purpose.
While all of this is important in case you pass away when a child is young, you can also use trusts to transfer money to your children during your lifetime or when they are adults. Trusts are very versatile, and it is up to you how they are structured and utilized to care for your children.
Contact a Trusts Lawyer Today for Help
If you are thinking about setting up a trust for a child and are not sure if a trust is the right legal tool to use, Parman and Easterday can help you make an informed decision on what approach is best for your situation. If you do decide to go forward with a trust, we can assist you in selecting the right type of trust and in making sure the trust is legally valid and appropriately funded. Give us a call today to find out more about creating a trust to help secure your child’s future.
There is nothing more important for parents than making sure their kids are provided for in the face of an uncertain future. To find out more about how we can help you, please call us today at (405) 703-9987 or (913) 385-9400 or contact us online to speak with a member of our legal team.