Say that you want to set up a trust for a grandchild so that they can pay for their education. It’s a wise use of your money, and creating that trust can be part of your estate planning.
As you do it, though, remember that you can create a trust that the child can use for multiple purposes. It does not have to be constrained to education alone.
After all, perhaps your real goal is just to make sure that the money sees good use. That starts with education, but you’re also open to other things. The child could use it to buy a home, start a business, buy an engagement ring or something else of this nature. You can specify all potential uses in the trust. You just want to make sure it’s meaningful and that it’s something you approve of.
Plus, you have to consider outside factors in your grandchild’s life. What if they have a chance to get more scholarships, but they don’t apply themselves since they know they have a trust for tuition? Certainly, that wasn’t your goal. You would rather have them know that they can use the money to buy a home after graduation. You want them to understand that they’ll get more out of the trust if they get scholarships to offset the tuition payments.
Trusts are flexible and they can do quite a lot. You can really create them in a way that directly puts your heirs first and accomplishes your goals at the same time. Just make sure you know exactly what legal steps you should take.