- While you want to provide for your children after your death, a will may not be the best option.
- Children who aren’t ready to handle money can benefit from a trustee’s guidance.
- If your child is at risk for lawsuits due to previous marriages or legal troubles, a trust can help protect assets from certain types of creditors.
- Trusts can be used to protect children from a previous marriage.
- Talk to your Financial Advisor to see whether trusts might be useful in your estate planning, and of course, discuss these matters with your independent legal or tax adviser.
Children not ready to handle the money
Trusts can also ensure that you have a say in how assets you leave your children will be distributed, which can be helpful if they’re very young or, in your view, not ready to handle a large inheritance. According to David English, professor of law at the University of Missouri School of Law and author of numerous books on estate and financial planning, parents often give trustees discretion over how much money adult children should get, and when, or even how, the assets will be used.
You may also want to put a vacation home in trust for the kids—along with enough money to maintain it—to prevent squabbles among siblings, adds English. “Sometimes the worst way to gift property is to divide it equally among the children in your will,” he says.