Two reasons to create a trust for college tuition
As you consider how you want to leave an inheritance to your family, you may decide that you want to pay for your grandchildren’s college tuition. You want to leave money behind so that you know they can get an education without having to worry about the cost, something that has proven to be very problematic for those who have to take out student loans.
You can do this in a few different ways, including simply leaving a check to your grandchild, but it may be best to use a trust. Here are two reasons why.
The trust guarantees the proper use
First of all, you can set the trust up so that it guarantees that the money will be used for tuition. If you simply give the money to your heir, you can tell them that you want them to use it for college, but there’s no legal obligation to do so. They may decide not to. But if you put it in a trust that is dedicated only to tuition and related costs, you know that this won’t occur.
The trust can specify an age
Another reason to use a trust is that you can specify when the person is supposed to get the money. Your grandchildren may still be minors as you build this estate plan. You don’t want to leave someone who isn’t even an adult this much money, and putting it in a trust guarantees that it will be available for them when they really need it.
Creating a trust
If you do have these types of goals, be sure you know exactly what legal steps to take to create the right trust that works for your heirs.