A revocable trust can protect families in multiple ways, one of the which is safeguarding assetsof minor children. California law provides that children are able to inherit when they become 18 years old. This means that if you pass away, your children will be entitled to their entire inheritance at 18 years old, even though they may not be mature or financially savvy to handlesuch a big responsibility. On the other hand, if you create a revocable trust, you can control when your children will receive their inheritance.
For example, you may wish for your child to receive a partial inheritance at 25, and the remainder at 30. Your child’s inheritance will be held in a trust, and distributed only after your child reaches a certain milestone, like graduating college. A later distribution will help insure that your children will have the maturity and financial responsibilityto handle their inheritance. In addition to determining at what age your children will inherit, a revocable trust can guide your children’s life decisions through specific distributions. For instance, from the age of 18 to 22, you can encourage your children to pursue a college education by paying tuition and living expenses from the trust funds. After graduating from college, your trust distribution can encourage your children to be productive members of society by pursuing a career and not relying on monthly trust distributions as their ultimate “pay day.” However, you can also reward your children with funds from the trust, if they need help with a down payment for a house, start up expenses for a business, or wish to continue their education.
In essence, your revocable trust can guide your children through its timed distributions, much like you would guide them during your lifetime. As a result, a personalized revocable trust created specifically for your family will allow you to pass to your children not only your financial assets, but also your family’s values and legacy.
To learn more about how creating a revocable trust can benefit your children, please contact Tatiyants Law at (818) 956-9200 or e-mail email@example.com
Sona Tatiyants and Tatiyants Law are not affiliated with Perennial Financial Services or LPL Financial.