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Gift Trusts for Minors

School is in session and the little (and not so little) ones are off. You can see them in the mornings, walking through our Del Monte Forest to get to their schools on time. It is a wonderful time of year that is focused on children, routines, goals, and education. On a broader scale, as a parent or grandparent or aunt or uncle, it makes sense to think about how we are securing the future for these children waking up early for school each morning. Estate Planning offers a variety of incredible tools to save money for our little loved ones’ futures. In particular, it could be time to establish a gift trust.

A gift trust is an irrevocable trust (which means that once you gift the money into the trust, you have relinquished your right to the funds, but those same funds are also now protected within that trust from any future creditor of your’s or your beneficiary’s). Instead of gifting money directly into the hands of a loved youngster, younger gift recipients will benefit from having the money kept safe in a trust. It will help the youngster to understand that the money is for their benefit, but not necessarily right away. A gift trust enables us to select a trustee to manage the money on behalf of the young gift recipient, and to put parameters in place for distribution.

Creating a gift trust also benefits the gift giver because it allows the gift giver to reduce their ultimate taxable estate, so the exposure to “death taxes” will be reduced – in essence, you are getting some money out of your estate during your lifetime, rather than waiting until you are no longer. A gift trust also benefits the gift giver by providing security that our heartfelt gifts will not be squandered or misused. A gift trust is easy to establish and is a smart choice for anybody who wants to make a gift of any magnitude.

We can all look back to a distant fresh fall morning and recall some sweet memories of our school days; now being on the other side of the spectrum, it is a blessing to be able to establish a legacy for one of the school-goers in your life. Establish a gift trust, and make an impact you never knew you could make for your little scholar.

Contact a Fremont Estate Planning Attorney
if you would like to discuss the advantages and disadvantages of a revocable living trust.
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