You have a minor child or children, and you want to make an estate plan. Why is it important to create a trust for them? Go through this quick exercise to answer this question based on your own circumstances.
- Write the total gross value of your assets (approximate)
- Write the total amount of your life insurance
- Add lines 1 and 2 (this is your total gross estate)
- Write the total of your debt (mortgage, credit cards, student loans, etc.)
- Subtract line 4 from line 3 (this is your total net estate)
- How many children do you have?
- Divide line 5 by line 6 (this is the total estate per child)
Are you comfortable with the possibility that if you passed away, your children could receive this amount (approximately) when they turn 18, knowing they can do ANYTHING they want with the money?
If “Yes“: Then a Will might be an appropriate plan for you.
If “No“: Then you need an estate plan that includes a trust to manage the assets for your children until they are older and more mature. This type of plan will allow you to protect your children and the assets they will receive.
About The Author: Richard Chamberlain
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