Pros and Cons of Holding Property in a Trust for Children
It is not all that uncommon to be concerned that the assets or property in a trust will be misused by children. A trust can offer protection for the child and the assets. If you are thinking of placing property into a trust for children, there are some things to consider.
As mentioned, a trust for children offers a lot of protection. Whether it be from creditors, ex-spouses, or concerns over whether the child will handle the money properly, a trust will keep it protected. For instance, if your child were to be in a car accident, and sued, the trust cannot be forced into paying the damages. The court cannot liquidate any assets held in the trust.
Additionally, assets held in a trust will avoid probate, and see a quicker resolution than those not protected. Probate can last for months or years and drain the estate’s assets with court costs and attorney’s fees. However, since assets you place in a trust avoid probate, a trust can ensure that its beneficiaries inherit, saving them both time and money.
A trust will also help you avoid guardianship, should you become incapacitated, and unable to look after your assets. Without the proper documents in place, a court will appoint a legal guardian to handle your affairs. However, if you do not want a court making this decision, the right kind of trust will allow you to decide who will manage your estate in the event you are unable to do so.
Privacy and protection from being contested are also both reasons to consider a trust for your children. What happens in a trust stays private, and they are also difficult to contest. This can be a real benefit if you are concerned about making sure that your wishes are carried out.
Setting up and funding a trust for children is more expensive than simply having a will drawn up. Trusts can be complicated to set up and require assistance from an asset protection attorney. The instructions you give your trust should be well thought out and every step should be detailed. The language that is used in the document must be carefully considered to ensure that it does what you want it to do.
There will also be assets or property that you do not want to place in the trust. For this reason, you will still need to draw up a will to account for the distribution of these assets.
Contact The Mattar Firm
It is important to think about why you would like to institute a trust, and to explicitly spell out what you want the trust to accomplish when you are instituting it so that when you discuss your plan with an estate attorney, they can be sure your wishes are met. An experienced estate planning attorney will be able to guide you and help you make the right decisions your family. When considering a trust for your children, call The Mattar Firm at 239-222-2222 or 844-444-4444.