Estate Planning 101
Aside from your love, probably the greatest gift you can give your children to provide for them. But how do you provide for your kids if you’re not alive? Basically, you need a plan. It doesn’t have to be complicated or unduly expensive. First, have a qualified attorney prepare your Wills. In your Wills designate who will raise your children if something happens to you and your spouse. Also in your Wills, include a trust for your kids’ benefit.
This trust can take many different forms depending on your specific needs and circumstances, but essentially it will create a pot of money from which your kids can draw for all the daily necessities of life. This pot of money will be used for food, clothing, shelter, school supplies. It can also be used for college, graduate school, starting a business, buying a house, travel and basically anything else important to you and your children.
You’ll want to select a responsible trustee to oversee the money and dole it out at the appropriate times. And you will probably want to set an age, the older the better in my opinion, for the trust funds to be paid outright to the child. Remember, the child will always have access to the funds in the trust, but while those funds are locked up in the trust they are protected from creditors, spouses and others. So, what assets generally fund a trust? Often it is the proceeds from the sale of a house, bank and brokerage account assets and perhaps most important – life insurance.