Say you have minor kids, you pass away, and you leave money to be used for the benefit of your children (who are now under the full care of your ex). One option is, of course, to leave the money to your kids such that your ex manages the funds while the children are minors.
If you trust your ex, this is a viable option. Many people divorce and maintain trusting relationships with their ex-spouses.
Or…you can create a trust.
A trust can protect your assets from your ex’s control, even if your ex has custody of the children
A trust allows you to designate someone other than your ex – known as a trustee – to manage your money and only distribute funds for the benefit of your children as you have defined in the trust document. You can be creative with when and how the funds are distributed.
You can even specifically state that your ex is never to be named trustee.
A trust can keep your children’s information private
When a will is presented to the court after someone dies (which is required for the probate process to occur), it becomes a public document. Any information, including the names of your children or other beneficiaries, can be obtained by anyone.
A trust avoids the probate process (the process where the court oversees how your assets are settled after your death) and therefore protects the identity of your beneficiaries.
A trust allows you to customize how assets are received by your children.
You can choose to direct your assets to help influence your children toward long-term goals, such as getting a college education or purchasing a home. You can state that funds are to be used for that purpose. You can also instruct the trustee to pay out funds to your children when they reach a certain age (like 35) if you think that inheriting funds at a younger age may be too early for them.
A trust is completely revocable and can be altered at any time while you are alive.
Some parents feel that once they put something on paper, it is set in stone. Not true. A revocable living trust can be amended or even revoked at any time. You can provide instructions based on your current situation, and then decide you want to insert new instructions as circumstances change.
Parents who believe that trusts are only for very wealthy people should look again at the benefits that a trust can offer.
To schedule a free consultation, contact us at (703) 215-2088.