Protecting the Assets You Leave to Your Children

Family in parkIt’s a rare situation, but it does sometimes happen: Both parents pass away while their children are still minors, or are young adults without the experience to handle a large sum of money. You want your children to be financially protected, as well as provide assets such as money for college or a down payment on their first home. That’s why you purchased a life insurance policy or stashed money in savings.

Unfortunately, simply leaving a large sum of money to your children might not be enough to adequately protect them. Young adults can make mistakes, leading to collections actions from creditors. Sometimes they simply don’t make the wisest decisions with a  large sum of money. Or they could marry the wrong person, and lose a significant sum of money in a divorce settlement.

There are numerous situations in which your child, as an heir to your assets, could face a tragic loss of the money you left to them. Luckily, a skilled estate planning attorney can also guide you through the establishment of a trust, which will shelter those assets from problems like aggressive creditors, greedy ex-spouses, or unwise financial decisions.

Which trust is right for your situation, and which options should you choose? The answers to those questions depend largely upon your personal preferences, the age and abilities of your children, and the type of protection you wish to confer to them. Fortunately, we have ways of structuring trusts in response to almost any situation you can imagine. You can appoint a third party as Trustee, or allow your children to take over when they reach a specific age. You can even select a lifetime option that keeps assets sheltered within the trust for your child’s entire life. At some point in the distant future, those assets can be transferred to your grandchildren, or even great grandchildren.

The important thing to remember is that you have to make these decisions now, before anything happens to you. Remember, your child, or the appointed Trustee of the trust, will not have the ability to restructure the trust after the fact.

There is no one-size-fits-all option that works for everyone, but there is an option that works for just about any situation. Call our estate planning attorney to discuss your options, and we can help you select the type of trust that is right for your situation.

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