Most parents plan on having their children inherit their estates. However, when doing estate planning to take care of your children, you want to make sure you do it correctly. Getting your Will or Trust done right ensures that you can choose how you want to assign the property to your children, and also protects their assets from creditors. By using an appropriate strategy and preparing a Trust for your children, you can ensure that your plan offers asset protection for your children in case they face (1) creditors, (2) predators, (3) a divorcing spouse, (4) lawsuits, or (5) bankruptcy.
To give your children solid asset protection, you need to make sure you put the right language in your Trust and name a Trustee you can count on. By making sure you complete these two steps, you can make sure your children’s assets are protected for whatever period of time you pick, even through your children’s lifetime.
Trusts can be written to ensure that unused parts of your child’s inheritance can be given to future grandchildren with the same protection you gave to your child. Or, if that child has no children of their own, you can decide to allow the inheritance to go to your child’s other siblings or to some other person or charity. By drafting your trust this way, you allow your child to keep the assets you pass down to them apart from a spouse. This means that once you die, your assets go right to your children’s separate trusts, and protects the money from a possible divorcing spouse or creditor issues that could arise.
You should pick a Trustee you can trust, allowing that person to control investment and distributions from the Trust to care for the child until the child reaches a more mature age. Using an independent trustee in case any creditor issues arise for your child can help protect your child’s assets.
We've been advising clients on how to prepare Trusts to protect their children's assets for over 20 years. If we can be of service to you, your family, friends, neighbors, or co-workers, give us a call at 253.858.5434 to set up an appointment today. We proudly serve clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.