[vc_row][vc_column width=”1/1″][heading]Simple Kids’ Trusts vs. Lifetime Protection Trusts[/heading][vc_column_text]Simple kids’ trust might be a good option if you have a couple hundred thousand dollar estate with no life insurance and three children. But in most cases, a lifetime family protection trust is a much better option.
Ask yourself the question, “Do you want your trust to continue for the lifetime of your children, or do you want to simply provide that, at appropriate ages, the trust will be distributed to them?”
An example of a simple child’s trust would be assets held in a single trust until the youngest child reaches a certain age, or possibly graduates from college, that then makes distributions based on those milestones. Usually, the trusts will provide for the “health, education, support and maintenance” of a child prior to receiving the distributions at age 25, 30 and even 35. Once they received their distributions, however, their inheritance will no longer have the significant protections of the trust.[/vc_column_text][divider line_type=”No Line” custom_height=”40″][vc_text_separator title=”A Lifetime of Protection” title_align=”separator_align_left”][vc_column_text]A lifetime family protection trust serves the same purpose as a simple trust in terms of passing on inheritance to your children, but it protects the assets in each child’s trust from claims from his or her spouse (including claims from a divorce or other marital rights that may attach at the time of their death) as well as against creditors who may sue your child over claims of negligence (e.g., drinking and driving, bad business deals, etc.). It ensures the assets that remain at each child’s death, if any, will pass free of probate, free of any state inheritance taxes and free of any federal estate taxes.
In addition, each child can be granted control and access (at an age you specify) to his or her assets. Therefore, it makes sense to allow those assets to stay in trust to continue those protections rather than terminating the trust at age 30 or 35 and completely losing all of those benefits. Also, a family protection trust allows you to give your children the flexibility to leave some or all of the trust assets in further trust for their spouses.
Lifetime family protection trusts can be set up for the sole purpose of giving children the opportunity to “grow the trust” with their own business deals and investments. If such investments and businesses start from inside the trust established by the parents, it can provide significant asset protection barriers.[/vc_column_text][/vc_column][/vc_row]