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PitterPatter11
Baby Boy is Here!
Member since 5/11 7612 total posts
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Momma <3
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Trust for Child in Will
We are adding a simple trust to our will for our DS.
How have others allocated money to their child? At what ages and percentages?
Thank you!
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Posted 4/11/21 4:01 PM  |
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chris605
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Member since 5/05 3203 total posts
Name:
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Re: Trust for Child in Will
We did 25% at 18 if NOT in college, 50% if in college (in hopes to help pay for school expenses), additional 25% at 21 and remaining at 25. Our thought process was so they had some sort of savings/nest egg when get out of college and just starting out. Without giving it all at once so it’s not all spent.
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| Posted 4/16/21 5:32 AM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19453 total posts
Name:
L
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Re: Trust for Child in Will
What has your lawyer suggested? This presumes over a million in assets. If less the percentage would change to provide enough to pay for college. Are you paying for college, a house, you really need an attorney to look at everything for you specifically.
HEMS trust.
10% at 18
Additional 20% a 20,t 21 or 22 if graduated from college. Receipt upon completion of degree. Otherwise give to charity. Provide incentive to graduate on time, plus one additional year. Will also help pay off any college loans.
30% at 30. You want the child to work. By giving more earlier reduces the incentive to work.
30% at 35.
10% at 40.
Or if you want the trust to survive for grandchildren, push the ages back. It also depends upon the amount of money. Are you giving regular payments or one time windfalls. Have you explained finances or are just letting the child wing it? What are your expectations for your child? Are their circumstances where you would want the money given early? Late? I would not want to control who they marry because those kinds of trust fail. I would not want the trust to last too long, otherwise it feels like you don’t trust the child. Prince Harry and Prince William both have trusts like these where the money was given at ages with no conditions. I would put in graduate from college, and attend one finance class so they understand how to manage their money, but that is just me. You can set it up how you want.
Message edited 4/16/2021 3:05:55 PM.
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| Posted 4/16/21 2:44 PM |
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PitterPatter11
Baby Boy is Here!
Member since 5/11 7612 total posts
Name:
Momma <3
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Trust for Child in Will
Thanks everyone!
My DS already has a sizable 529 for being young as well as money in a separate bank account. The assets would be over a million.
The lawyer said they usually do 50 at 25 and 50 at 30.
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| Posted 4/16/21 3:06 PM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19453 total posts
Name:
L
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Re: Trust for Child in Will
Do you want flexibility, asset protection? If your child becomes a physician then they may want asset protection, do you want flexibility to give when milestones are reached? The suggestion is your attorney offered is the simplest. Not your attorney, but I would really look into the behavior of kids who receive $500,000 at 25 at their outcomes.
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| Posted 4/16/21 3:11 PM |
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PitterPatter11
Baby Boy is Here!
Member since 5/11 7612 total posts
Name:
Momma <3
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Re: Trust for Child in Will
Posted by LSP2005
Do you want flexibility, asset protection? If your child becomes a physician then they may want asset protection, do you want flexibility to give when milestones are reached? The suggestion is your attorney offered is the simplest. Not your attorney, but I would really look into the behavior of kids who receive $500,000 at 25 at their outcomes.
Thank you for the Information. I was initially going to split it into thirds at 25, 30, 35.
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| Posted 4/17/21 12:07 AM |
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ap123
LIF Infant
Member since 10/10 268 total posts
Name:
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Re: Trust for Child in Will
If your child doesn’t complete college you’d give their 20% of their inheritance to charity? I had never really thought about that. But what if they want to be a plumber or an electrician or something else that doesn’t require a college degree?
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| Posted 4/17/21 4:33 AM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19453 total posts
Name:
L
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Re: Trust for Child in Will
Posted by ap123
If your child doesn’t complete college you’d give their 20% of their inheritance to charity? I had never really thought about that. But what if they want to be a plumber or an electrician or something else that doesn’t require a college degree?
then, hypothetically they would get 800,000. You can still be a plumber and have a degree. I personally feel having a degree is worthwhile. I would not tell them what to get the degree in. But if you want to be an independent business owner, I would get a business degree or community college for an Associate degree. You can set your trust up however you want. You can say college does not matter. That is your right. But if you are leaving half a million to a 25 year old chances are that will not go well. I have friends whose parents did that, and some are dead, others got into drugs heavily. Only one was successful but they graduated from college.
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| Posted 4/17/21 5:36 AM |
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LuckyStar
LIF Adult
Member since 7/14 7272 total posts
Name:
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Trust for Child in Will
We haven’t done this yet, but in a similar vein, while I wouldn’t stipulate college (though I can’t imagine DD wouldn’t go) I would stipulate that she must be employed in order to receive the money.
I think I would do partial at hs graduation with the intention of paying for college- enough to pay for undergrad and grad school and some left over to get started after graduation.
Then split at 30, 35, 40.
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| Posted 4/17/21 6:15 AM |
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ap123
LIF Infant
Member since 10/10 268 total posts
Name:
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Re: Trust for Child in Will
Posted by LSP2005
Posted by ap123
If your child doesn’t complete college you’d give their 20% of their inheritance to charity? I had never really thought about that. But what if they want to be a plumber or an electrician or something else that doesn’t require a college degree?
then, hypothetically they would get 800,000. You can still be a plumber and have a degree. I personally feel having a degree is worthwhile. I would not tell them what to get the degree in. But if you want to be an independent business owner, I would get a business degree or community college for an Associate degree. You can set your trust up however you want. You can say college does not matter. That is your right. But if you are leaving half a million to a 25 year old chances are that will not go well. I have friends whose parents did that, and some are dead, others got into drugs heavily. Only one was successful but they graduated from college.
I see your point. But in that case id just defer payment to 30. I’d be so resentful of my parents if they stipulated college degree and handed 20% of my inheritance over to charity as punishment. But I do see what you mean about not giving too much to an immature young person.
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| Posted 4/17/21 8:17 AM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19453 total posts
Name:
L
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Re: Trust for Child in Will
Posted by ap123
Posted by LSP2005
Posted by ap123
If your child doesn’t complete college you’d give their 20% of their inheritance to charity? I had never really thought about that. But what if they want to be a plumber or an electrician or something else that doesn’t require a college degree?
then, hypothetically they would get 800,000. You can still be a plumber and have a degree. I personally feel having a degree is worthwhile. I would not tell them what to get the degree in. But if you want to be an independent business owner, I would get a business degree or community college for an Associate degree. You can set your trust up however you want. You can say college does not matter. That is your right. But if you are leaving half a million to a 25 year old chances are that will not go well. I have friends whose parents did that, and some are dead, others got into drugs heavily. Only one was successful but they graduated from college.
I see your point. But in that case id just defer payment to 30. I’d be so resentful of my parents if they stipulated college degree and handed 20% of my inheritance over to charity as punishment. But I do see what you mean about not giving too much to an immature young person.
it is your parents money and they get to choose how to spend it. Be glad to get 800,000 more than you would have if you had to earn it on your own. That is why I feel college helps a child grow into an adult. They learn to prioritize time management, have an objective, and reach it. By just giving money to a young kid with zero direction leads to poor outcomes. See I would be resentful of knowing I needed to wait so long to use the money. I would rather be able to pay off college, decide if I want a home earlier. Saying wait to 30 does not give those opportunities. The kid would feel like the parent did not trust them at a younger age.
Message edited 4/17/2021 4:39:39 PM.
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| Posted 4/17/21 4:38 PM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19453 total posts
Name:
L
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Re: Trust for Child in Will
Posted by LuckyStar
We haven’t done this yet, but in a similar vein, while I wouldn’t stipulate college (though I can’t imagine DD wouldn’t go) I would stipulate that she must be employed in order to receive the money.
I think I would do partial at hs graduation with the intention of paying for college- enough to pay for undergrad and grad school and some left over to get started after graduation.
Then split at 30, 35, 40.
what if they decide to do volunteer work, would that count? What if they want to be a stay at home parent? Is that a valid choice? How long do they have to work in order to receive the money? Will working at a fast food restaurant be enough? Can they work part time? What if they want to be an artist or writer? Will that be enough of a job where there is no weekly paycheck?
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| Posted 4/17/21 4:44 PM |
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LuckyStar
LIF Adult
Member since 7/14 7272 total posts
Name:
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Re: Trust for Child in Will
Posted by LSP2005
Posted by LuckyStar
We haven’t done this yet, but in a similar vein, while I wouldn’t stipulate college (though I can’t imagine DD wouldn’t go) I would stipulate that she must be employed in order to receive the money.
I think I would do partial at hs graduation with the intention of paying for college- enough to pay for undergrad and grad school and some left over to get started after graduation.
Then split at 30, 35, 40.
what if they decide to do volunteer work, would that count? What if they want to be a stay at home parent? Is that a valid choice? How long do they have to work in order to receive the money? Will working at a fast food restaurant be enough? Can they work part time? What if they want to be an artist or writer? Will that be enough of a job where there is no weekly paycheck?
She would need to have paid employment of her own choosing at a level that she could support herself if the trust did not exist. The employment must be her own, obtained through her own merit, irrespective of a spouse or partner.
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| Posted 4/17/21 6:27 PM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19453 total posts
Name:
L
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Re: Trust for Child in Will
Posted by LuckyStar
Posted by LSP2005
Posted by LuckyStar
We haven’t done this yet, but in a similar vein, while I wouldn’t stipulate college (though I can’t imagine DD wouldn’t go) I would stipulate that she must be employed in order to receive the money.
I think I would do partial at hs graduation with the intention of paying for college- enough to pay for undergrad and grad school and some left over to get started after graduation.
Then split at 30, 35, 40.
what if they decide to do volunteer work, would that count? What if they want to be a stay at home parent? Is that a valid choice? How long do they have to work in order to receive the money? Will working at a fast food restaurant be enough? Can they work part time? What if they want to be an artist or writer? Will that be enough of a job where there is no weekly paycheck?
She would need to have paid employment of her own choosing at a level that she could support herself if the trust did not exist. The employment must be her own, obtained through her own merit, irrespective of a spouse or partner.
and what if she became disabled? G-d forbid. Or attends graduate school? Or the person of her dreams is a physician who wants her to be the office manager? Would that not be acceptable?
Message edited 4/17/2021 11:27:35 PM.
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| Posted 4/17/21 11:24 PM |
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LuckyStar
LIF Adult
Member since 7/14 7272 total posts
Name:
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Re: Trust for Child in Will
Posted by LSP2005
Posted by LuckyStar
Posted by LSP2005
Posted by LuckyStar
We haven’t done this yet, but in a similar vein, while I wouldn’t stipulate college (though I can’t imagine DD wouldn’t go) I would stipulate that she must be employed in order to receive the money.
I think I would do partial at hs graduation with the intention of paying for college- enough to pay for undergrad and grad school and some left over to get started after graduation.
Then split at 30, 35, 40.
what if they decide to do volunteer work, would that count? What if they want to be a stay at home parent? Is that a valid choice? How long do they have to work in order to receive the money? Will working at a fast food restaurant be enough? Can they work part time? What if they want to be an artist or writer? Will that be enough of a job where there is no weekly paycheck?
She would need to have paid employment of her own choosing at a level that she could support herself if the trust did not exist. The employment must be her own, obtained through her own merit, irrespective of a spouse or partner.
and what if she became disabled? G-d forbid. Or attends graduate school? Or the person of her dreams is a physician who wants her to be the office manager? Would that not be acceptable?
She needs to be able to support herself. Leaving her career to work for a spouse who thinks so little of her that she's only good enough to answer his phone is not a means of supporting herself.
Disability is different. But if she is capable of working, she needs to work. For money. There is no free lunch and she can't go through life thinking she'll get one on my dime.
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| Posted 4/18/21 1:03 PM |
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seaside
LIF Adult
Member since 6/08 3101 total posts
Name:
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Re: Trust for Child in Will
I guess when making these decisions, it's important to keep in mind that this all only kicks in if all of the parents in the household die before the child comes of whatever age is deemed mature enough to handle the money.
Ideally, we all want to see our kids live to 18, 25, 30. To be mature enough to handle what we want to give them when they are gone.
It's a terrible scenario to think about.
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| Posted 4/18/21 4:01 PM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19453 total posts
Name:
L
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Re: Trust for Child in Will
Posted by seaside
I guess when making these decisions, it's important to keep in mind that this all only kicks in if all of the parents in the household die before the child comes of whatever age is deemed mature enough to handle the money.
Ideally, we all want to see our kids live to 18, 25, 30. To be mature enough to handle what we want to give them when they are gone.
It's a terrible scenario to think about.
that is not necessarily true. People establish trusts for living relatives all of the time. It can be used as a tax vehicle, for special needs individuals, a way for someone to shelter assets in case of divorce, etc.
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| Posted 4/18/21 4:07 PM |
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seaside
LIF Adult
Member since 6/08 3101 total posts
Name:
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Re: Trust for Child in Will
Posted by LSP2005
Posted by seaside
I guess when making these decisions, it's important to keep in mind that this all only kicks in if all of the parents in the household die before the child comes of whatever age is deemed mature enough to handle the money.
Ideally, we all want to see our kids live to 18, 25, 30. To be mature enough to handle what we want to give them when they are gone.
It's a terrible scenario to think about.
that is not necessarily true. People establish trusts for living relatives all of the time. It can be used as a tax vehicle, for special needs individuals, a way for someone to shelter assets in case of divorce, etc.
I just meant that she was putting a simple trust in her will, so I thought the presumption was that she would not be around to allocate/distribute the money she left her kid(s) how and when she saw fit.
I know that trusts exist outside of that context.
ETA: Your post up above was really informative and has some great considerations for establishing any kind of trust.
Message edited 4/18/2021 4:18:11 PM.
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| Posted 4/18/21 4:14 PM |
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