A minor trust is a trust that provides property to a young person. The trust is monitored by the trustee until the young person turns a certain age—usually either age 18, 21, or 25.
Read on to learn how a minor trust can benefit your child.
Why a Minor Trust is Beneficial
A minor trust allows you to set money aside for your child until they reach a financially responsible age. You may set up this trust through a will or a living trust.
You’ll leave the property to your child in the document, but you’ll need to write in a provision that states if the beneficiary is still a minor when you pass, the property within the minor trust will be designated to a trustee to care for it until the child turns the age of your choice.
You can choose the end-date for the trust to be any age you’d like. Although, it’s not a good idea to have your child’s trust last too long. By the time your child reaches their early-to mid-30’s, they will probably have matured as much as they ever will.
A major benefit of a minor trust is that you can set up the trust in a way that provides compensation to the child in increments. This will make sure that your child doesn’t spend all their money right away.
You may designate your beneficiary to receive payments over several years so that they don’t end up with nothing later on in life after spending some of the money. A good way to set this up is to provide some of the money when your child turns 25, another portion when they turn 30, and the remaining money when the child turns 35.
We Can Help
If you are interested in setting up a minor trust for your child, our financial professionals at Legacy Enhancement Trust are here to assist you. Our team has helped many others with their financial goals and we can help you, too. Don’t wait—contact us with your financial goals right away.
Call Legacy Enhancement Trust today at (888) 988-5503 to learn how we may assist you!