If you are a parent, there is a good chance you have heard of minor trusts. A minor trust allows you to leave money and assets to your children in a way that is protected from creditors and predators.
While minor trusts can be a great way to provide for your children's future, there are some common mistakes that parents make when creating them. In this blog post, we will discuss the most common errors parents make when creating minor trusts, and how to avoid them!
#1 - Failing to name a capable trustee.
It is important to name a responsible and capable trustee who will be able to manage the trust assets and make decisions in the best interests of the minor beneficiaries.
One common mistake parents make is choosing a trustee too quickly. Minors cannot legally enter into contracts or manage financial assets, so it is crucial to ensure that the trustee selected is responsible, detail-oriented, and trustworthy.
For example, you can name a responsible adult as the trustee and give them specific instructions on how to manage the trust assets. Or, you can name a corporate trustee, such as a bank or trust company, to manage the trust assets.
#2 - Assuming family members are the best choice for trustees.
Another common mistake is assuming family members are always the best choice for trustees. While it is true that family members may be more familiar with your children and their needs, they may also have their own agendas and may not always act in the best interests of the minor beneficiaries.
It is important to carefully consider all potential trustees before making a decision.
If you are having trouble finding a trustee, you can contact one of our experienced trust professionals for assistance.
#3 - Not having the appropriate party draft the trust document.
The terms of the trust should be carefully considered and drafted by an experienced professional to ensure they are clear and legally binding.
One common mistake is having a family member or friend who is not an attorney draft the trust document. This can lead to ambiguity and problems down the road.
If you are unsure about the terms of your trust, it is always best to consult with a professional before signing anything.
We're Here to Help
If you are considering creating a minor trust, we can help. Our team of experienced trust professionals can help you draft a trust document that meets your unique needs and protects your assets. Contact us today to schedule a consultation!
Call Legacy Enhancement Trust today at (888) 988-5503 to learn how we may assist you!