Monday, April 09, 2007

The Wonderful World of Trusts - Pt. 1

Trusts can be an important part of your estate plan. A trust is not just for the "uber-rich", but rather it is a basic procedure to control who, how and when your beneficiaries inherit your assets. For example, if you have young kids that would inherit your estate upon you and your spouse's passing, you can delay their receipt of those funds until a later point in time when they are hopefully more mature. Otherwise, without a trust, they could get a large lump sum at the ripe old age of 18 in Iowa. While it may seem hard to believe, 18 year olds are not known for being particularly frugal with their funds; whether it is $10.00 or $100,000. With a properly structured trust, you could delay receipt of those funds until later in their life, or upon achieving a milestone or some other identifable point in their life that you choose. Plus you can control how much they have access to of the trust funds until that point.

If you have young children or young grandchildren, trusts are an important-and critical-tool to act in their best interest and for their own protection. While you may not be able to be there to provide financial direction and guidance, a trust will enable them to hopefully make the right decisions at appropriate times.

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