As you create your estate plan, you may decide to simply leave money directly to your own children. Your heirs are old enough to know how to use this money properly and you don’t really want to have any control over it. You’re just hoping to give them an inheritance that they can enjoy in whatever way they feel is best.
But you also have grandchildren, and you’d like to leave them something specifically. Would it be wise to use a trust?
Specifying an age
There are a lot of reasons why this may be beneficial, one of which is that you can specify the age at which your heir gets the inheritance you’ve left. Maybe your grandchild is only five years old right now. There’s no point in leaving them any money, but you could create a trust that gives them that money when they turn 25. This can be very helpful at a time in their life when they need it much more.
Deciding on a goal
A trust also enables you to consider what goal you would like to set for your heir with that money. Maybe you don’t just want your grandchild to have a random fund that they can use for anything that they want. You’d like to set this up so that they can use it to pay for college tuition or something a long time in their future. By putting the money into a trust, you ensure that it actually gets used that way.
These are just two reasons why you may want to consider trusts if you’re leaving money to your grandchildren, so make sure you know what steps to take to set everything up.