Many parents with young children create a trust in their will that specifies when their children should receive assets if both parents die when the children are minors. “In the absence of a trust, the money will go to a child at age 18, and most parents think that any child under the age of 25 is too young to manage money,” says English.
Making the trust decision
Complex and often emotionally charged topics like this benefit from the help of an outside expert who has experience and perspective. Your UBS Financial Advisor is familiar with the nuances of inheritance and can provide a roadmap for setting up a trust now.
Blended families frequently use trusts to protect children from a previous marriage.
Children in extended and blended families
Maybe you’re confident that your adult child can handle an inheritance—but it’s his or her spouse you have doubts about. You might create a trust for your son or daughter so that only your child will receive the assets. And should there be a divorce, the ex-spouse, in many states, won’t have access to those assets. If your children happen to be in professions that are at high risk for lawsuits, such as medicine or architecture, an inheritance in trust is also protected from certain types of creditors.
Blended families frequently use trusts to protect children from a previous marriage. If you die first, there is nothing stopping your spouse from giving your assets to his or her own children from a previous marriage, leaving nothing to your own children. Instead, you can create a marital trust that is funded when you die. The trust provides for your spouse’s needs during his or her lifetime, and upon his or her death, the remaining assets go to your children.
“Trusts are the most flexible legal tool available to provide for your family in ways that you see fit,” says Wilms. “Good inheritance planning is much more than having a static will, and trusts can creatively address many of the complexities of family life.”