Your Grandchildren Need Protection
Terms you will need to know:
1. Trust — A relationship created at the direction of an individual, in which one or more persons hold the individual’s property subject to certain duties to use and protect it for the benefit of others.
2. Beneficiaries — An organization or a person for whom a trust is created and who thereby receives the benefits of the trust. One who inherits under a will. A person entitled to a beneficial interest or a right to profits, benefit, or advantage from a contract.
3. Trustees — An individual or corporation named by an individual, who sets aside property to be used for the benefit of another person, to manage the property as provided by the terms of the document that created the arrangement.
We all want what is best for our family. We have worked hard, saved money, and put ourselves in a position to be able to help our loved ones out financially.
Whether we do that while we are still here or wait until after we pass away, our concerns likely remain the same: What if they are too young to make wise choices with their inheritance?
To remedy this concern, I have designed something I think you’ll want to learn more about:
The Grandchildren’s Trust
Here’s how this works: when you pass away, a certain amount of money is allocated from your original, family trust, to a special trust. I like to think of this “special trust” as a container. This “container” holds an amount of money you want to give to your grandchildren. The “container” has guidelines/instructions for how the money can be spent to help out the grandchildren.
Examples of guidelines may be: Until all of my grandchildren have reached the age of twenty-three, the money from the grandchildren’s trust will be used to help out college tuition expenses, extraordinary medical expenses, or a combination of the two. Remember, how you want the money to be used, whether for education only, or unforeseen medical bills, is completely up to you. Setting up guidelines like these ensures that the money is not used foolishly.
All of your grandchildren remain beneficiaries of the Grandchildren’s Trust until the youngest grandchild reaches twenty-three (or whatever age you think appropriate). Then, whatever is left from the Grandchildren’s Trust is distributed, equally, to all of your living grandchildren.
The trustees of the Grandchildren’s Trust can be family members, a trusted friend or friends, or a professional trustee. The chosen trustee or trustees can help insure that the money is allocated the way your guidelines specify.
The ability to help your grandchil