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Creating a trust that plans for the unexpected

On Behalf of | Jan 23, 2020 | Trust Administration |

When you create a trust, it is important to think about the unexpected — about the things that may happen that you cannot predict. You do not want to accidentally keep money from your heirs when you would have preferred to pass it on to them. You can’t change the trust after you pass away, so you must plan for all possible outcomes in advance.

For instance, say you create an educational trust for a child that will just pay for school-related expenses like books, tuition, room and board and other such costs. However, your child gets married while in school, and then their spouse gets sick. They quit school to take care of them. Do you really want to say they cannot have money they may desperately need just because they’re not paying tuition with it?

Or, maybe you create an incentive trust for a child stating that they only get the money when they graduate from college. However, they get involved in a car accident. They wind up with extensive injuries and become disabled. They have to drop out of school. Since they can no longer meet that incentive, does that now mean they do not get their inheritance? Or would you rather have the trust pay out so that they can use it as they need it?

These are just two examples, but they help to show how unexpected life can be. Make sure that a trust addresses multiple possibilities and allows for proper administration of the funds, no matter what happens.