header photo

How to Protect Your Children's Financial Future

July 18, 2015

As a parent, you want to ensure that your children and loved ones are taken care of in the case of your passing. Creating a legal Will or trust is an issue that you cannot overlook. In connection to this, make sure that your children won't misuse their funds before they reach legal age.

Testamentary trusts provide you with more control over the distribution and handling of the minor's funds. You choose how much money is received and when, regardless of the age of the inheritor. If you'd prefer to stretch out the finances over a longer period of time or provide a lump sum when the minor reaches the age of thirty instead of eighteen, it is completely up to your discretion.

Even with a testamentary trust, you will be required to have a trustee, which can be an individual, bank, or a company. The trustee will be in charge of managing the account and distributions. It is also up to your judgment to include any additional guidelines for the trustee to follow, such as investments and how the funds may be used.

For example, you may decide that the minor may only receive a certain amount to be used exclusively towards college tuition. It would be up to the trustee to enforce such rules. A personally appointed trustee also has the added benefit of no court supervision, saving unnecessary legal fees that can cut into the inheritance.

Any distributions, investments, or other actions pertaining to the minor's funds from a legal Will must be filtered through both the tutor and under tutor. A petition must be filed by the tutor that explains the situation or request, which must then be approved by the under tutor. Furthermore, the judge must also agree with the actions in order to move forward.

 

Go Back