Ask ‘what if?’ when drafting a trust
A trust is an excellent way to leave money and other assets to the next generation. It gives you control in a way that a will cannot.
For instance, a trust could stipulate that the beneficiary has to use it for educational purposes, or it could hold the money until someone is 30 years old to prevent them from getting it at too young of an age. You can make rules for how the assets get distributed and even how your heirs can use those assets.
The terms of a trust can be too strict
The trouble is that a trust can have strict rules that you may want to abandon. If you have already passed away, though, you can’t alter it. That’s why it’s important to ask a string of “what if?” questions while you draft it. Examples include:
- What if the child has an illness that leads to a disability?
- What if the child suffers an injury?
- What if they are taking care of a sick or elderly loved one?
- What if they decide to have a family and focus on their own kids?
- What if they want to volunteer?
For instance, a trust can say that the money is only for school, but then the child may drop out of college to offer care to a loved one or to start a family. Do you still want them to get the money even though they’re not in school? How else would you like them to use it?
Asking these questions can help you to create an estate plan with trusts and other options that really meet the needs of your family.