Many Massachusetts residents struggle with how to provide for their children after their deaths. One estate planning tool that many people use is the revocable trust. This versatile document allows parents the freedom to create a trust that works best for them and their children.
Distributions from the trust do not have to be made all at once. Parents can decide to give a specified portion of the trust to each child at a certain age. The trust can also provide a stipend for the person appointed as the children's guardian to help cover the extra expenses incurred when he or she agreed to care for the children.
If none of the distributions is before the age of 18, administering the trust should be less complicated for the trustee. If there is more than one minor child, a provision can be added to the trust to create a separate trust for each child when the oldest child turns 18. That way, as distributions are made, the accounting for each child's trust can be done separately.
Massachusetts parents can also restrict distributions if a child abuses drugs or alcohol. Conversely, a child can receive a bonus after certain events such as a college graduation, marriage or birth of a child. Additional distributions can also be made to pay for college, weddings and other special situations.
Only public policy, state and federal law, and the feasibility of certain conditions might limit the provisions of a revocable trust. Taking care of children from beyond the grave is often a goal of most parents. Estate planning can accomplish that goal with the right documents.
Source: entrepreneur.com, "Smart Estate Planning Tips for Entrepreneurs", Mark J. Kohler, June 25, 2015