- posted: Apr. 30, 2020
- Estate Planning
There's a pejorative term for rich kids that you have probably heard on television: the trust fund baby, loosely described as a young person who enjoys a reliable steady income from a trust established by parents. The term brings to mind a spoiled child with a sense of entitlement engendered by not having to work.
Despite the envy or disdain that such privilege may inspire, a trust fund is an extremely valuable resource for planning your children’s financial future, no matter how well off you are. In other words, a trust fund is not just for the rich but also for the middle class.
Unlike a simple bequest made by will, a trust fund allows you to control how the assets are paid out. If you should you die before your children reach an age of responsibility, a trust gives you a say in how that money is spent.
A trust fund allows you to name a trustee to manage your kids’ finances and dole out a prescribed amount on a monthly basis, plus checks for tuition, weddings and other specified allowable expense. It may even allow the trustee to invest the money to ensure that it continues to grow and provide for your loved ones for decades to come.
While the concept of trust fund baby makes for a great movie archetype, consider this: isn’t an economic safety net precisely what any responsible parent should want for their children? It is a way to provide for your kids and ensure that their money is handled responsibly, even when they cannot do it themselves. And if you’re worried about them turning out financially ignorant and spoiled, you can always dictate terms in the trust that keep them on a modest income, rather than a “ski slopes and Cabo weekends” budget.
For the peace of mind that comes from knowing that their children are cared for, Mesa, Arizona estate planning attorney Joseph M. Udall can turn your children into trust fund babies. Call 480-500-1866 or contact us online for a free telephone consultation.