With increasing age, there begins a keen awareness of estate planning, especially in parts of the United States with older populations, like Florida. Estate planning helps ensure that your child is financially well-cared for after your passing. Planning is especially important if the child tends to be more irresponsible with their money.
To help protect the asset that is being provided, a trust can be arranged within a will. This is called a testamentary trust and reduces the initial cost of setting up a trust. Instead of leaving money or an asset to the child, it will be left to a different trusted party and can release the money or asset in a predefined way identified through the will in the estate planning.
As each trust and will is written per the wishes of the party who currently has the asset or money, the terms of the distribution can be spelled out in a straightforward or more creative way. Distributions could be provided in a set time interval, could be incentive-based, or could be dependent on the child staying out of trouble. Probate can, sometimes, be circumvented if the asset is life insurance and the testamentary trust can be named as the beneficiary on the policy.
In a situation where a parent or guardian wants to ensure the financial well-being of their child but doesn’t always trust their child to make the right choices, a testamentary trust could be created within the will during the estate planning process. An attorney with experience in elder law or estate planning can help ensure that their client’s child is well-cared for after their passing.