How Do You Set Up a Trust For Your Grandchildren?
One of the greatest joys of being a grandparent is leaving a legacy for your grandchildren. Establishing a trust is one way to ensure that your grandchildren will benefit from the fruits of your labor even after you are gone. There are many different types of trusts to choose from and the type of trust you utilize will depend on your personal and financial objectives, your financial circumstances, and the type of assets you want to transfer to your grandchildren.
When transferring wealth to children, grandchildren, or other loved ones, it is important to do so in a way that minimizes taxes and maximizes the benefits associated with the transfer. Some grandparents create one trust and instruct the trustee to distribute assets equally to all of the grandchildren. Others create a unique trust for each grandchild. Each trust is then tailored to the needs and goals of that particular grandchild.
When you create your trust, think about who will benefit from the trust and what restrictions, if any, you want to place on the use of funds. You should also consider the age of your grandchildren and when they will actually receive their inheritance. For example, you may want to delay the distribution of trust funds until a grandchild graduates from high school or turns a certain age. You may even want to create incentives with your trusts, such as rewarding a grandchild for completing college or taking responsibility for their own financial goals.
Choosing a Trustee to Manage Trust Assets
The trustee is the party responsible for managing the trust assets and abiding by your wishes. This can be a family member, a bank or other financial institution, or a lawyer. When selecting the trustee, make sure you pick someone who is reliable and trustworthy and has a good understanding of your wishes. The trustee should be knowledgeable about trusts and have the skillset necessary to carry out your wishes. You may want to consider multiple trustees, especially if you are creating separate trusts for each grandchild.
No matter the nature of your estate planning instruments, it is important to have a professional draw up the documents. A qualified estate planning attorney will address any legal issues related to the trust and ensure that it meets your unique needs.
Contact a Naperville Estate Planning Lawyer
If you are like most grandparents, you want your grandchildren to benefit from your financial success. Setting up a trust for your grandchildren is a great way to transfer wealth. There are many different types of trusts to choose from and each has its own advantages and disadvantages.
Contact the Naperville estate planning attorneys at the Gierach Law Firm to discuss your options and receive personalized guidance. Call our office at 630-756-1160 for a confidential consultation.
Please note: These blogs have been created over a period of time and laws and information can change. For the most current information on a topic you are interested in please seek proper legal counsel.