Trust Fund: A Few Important Reasons to Consider Before Saving for Your Child’s Future
Trust Funds seem like something only a rich couple would be able to afford, but the truth of the matter is that anyone can set one up. Of course, that doesn’t mean it’s a smart idea to do so because of a number of different reasons. It can be a difficult road to the future, but at the end of the day, saving money for your kids besides the properties and sums in a will can bring peace of mind. So, should you create a trust fund with all that money you managed to make through smart investments? Well, that totally depends on your status in life and how difficult setting up one of these investments can be.
A Trust is difficult to Set Up
Like a lot of long term investments, setting up a trust means jumping past a number of legal hurdles. You’ll need to draw up the legal boundaries of the trust and when it can be released. You’ll have to figure out when your kid’s really matured and if they can handle the trust. After that, locating a trustee is the most important factor as they will hold and distribute the funds once you are gone. It eats up a lot of time and you still have to maintain a consistent investment in order to grow that fund. However, once everything’s set up, everything will be smooth sailing, and you can even set it up so that the trust is distributed slowly over time rather than in one large lump sum.
You don’t need to be Rich to Set One Up
There’s a common misconception that only the rich can set up trusts for their children. Hollywood likes to use trusts as dramatic devices, and often they are contested. The truth is that you can set one up quite easily even when you don’t make millions a year. It will take some time, but you can start with Kiss Trust, which is a system that allows you to save money on a meager to high income. Of course, there is a problem when setting up those savings. You’ll have to pay the trustee who holds your money, and then hire a lawyer to draw up the documents. Both of which can cost thousands of dollars of upkeep.
A Trust Protects your Assets
At the end of the day, trusts are established in order to protect your assets and that’s great for when you don’t want an excessive amount of taxation placed on your children’s future funds. When you use a revocable trust, you can even automatically grant control over all of your assets to the ones you trust the most. It’s an exceedingly effective way to save money for the future and give your kids a chance to live out a much better life.
Trusts are effective and almost completely guarantee the safety of your family, besides your last will and testament of course. However, you have to be prepared to pay a large amount to many people in order to maintain it. At the same time, you have to learn about all of your options first and meet with your most trusted lawyer and trustee.
Photo Attribution:
Featured and 1st image by David Castillo Dominici / freedigitalphotos.net
2nd image by Chanpipat / freedigitalphotos.net
3rd image by Stuart Miles / freedigitalphotos.net
