A trust is a legal arrangement that allows you to transfer property to someone else for the benefit of the beneficiary. It is the most common way of giving financial assistance to your child. It is a very simple process and can be done by you.
What are the different types of trusts?
There are two types of trusts which are:
Simple Trust – A simple trust is a type of trust in which the trustee manages the money for the beneficiary.
Living Trust – A living trust is a trust in which the trustee has to manage the money for the beneficiary until the beneficiary reaches a certain age or becomes competent. The trustee can also manage the money for the beneficiary for the rest of their lives.
When to start a trust?
The ideal time to start a trust is when your child is born, but you can start it even before that.
How to fund a trust?
There are many ways to fund a trust, but if you are not interested in the complexity then you can start with a simple trust.
Create a savings account
If you have an account in a bank then it is the best way to start a trust. You can create a savings account in a bank for your child and put some amount of money in that account. This money will be used for the benefit of your child.
Inherit the property
This is one of the easiest and safest ways to fund a trust. If you have a property and you want to transfer it to someone else then you can create a trust for your child. You can also transfer the property to the trustee.
Use the life insurance policy
You can use the life insurance policy to fund a trust. The policy owner can donate the money from the policy to a charity which is going to benefit your child.
Conclusion:
I hope you liked this post about “How to Fund a Trust”. I know some of you have already started a trust for your children, but if you have not then I am sure you will love the idea of starting one.