Tips for creating trust funds for grandchildren

On Behalf of | Jun 13, 2022 | Estate Planning |

If you are a grandparent living in Texas and you want to leave something to your grandchildren in your estate plan, you might want to consider creating trust funds for them. There are a few advantages to doing this, including the ability to specify when distributions happen and to better protect the funds in general.

Choosing the type of trust

Wills and trusts play different roles in estate plans. Usually, the kind of trust that you will set up for your grandchildren is irrevocable although you may want to talk to a financial or legal professional about your options based on your goals. However, another thing that you will need to consider is whether you want a separate trust for each grandchild or one large trust for the entire family.

Choosing the trust

The right trustee is also important. You can choose a family member or close friend, or you can choose a corporate trustee. If the trust is particularly complex, it might be better to name a professional as the trustee. This could also be the case if there is likely to be any family conflict regarding the trust, particularly if it is a family trust and the trustee must make decisions about the distribution of assets.

Using the right language

It is important that trusts are prepared carefully so that your intentions are clear and there are no legal errors. In addition, you should talk to your family about the trusts although you may want to think about how best to introduce your grandchildren to the idea.

Trusts can be an excellent way to preserve family wealth and help your loved ones do such things as purchase a home or get a start in life in other ways. However, it is critical to fully understand your options and how they relate to your family’s situation.