The First Step
Congratulations on taking the big step to ensure that the young ones in your life are cared for into the future, considering creating a trust for children. We are sure that this will give you peace of mind and security. Keep reading to learn more about how you can ensure that a Trustee that you appoint knows and can follow your guidance and values.
Can I Leave the Trustee Instructions for How to Use the Money?
You can leave guidance for the Trustee about your values and how you would like the money used. However, these are not binding instructions for the trustee. This is because there are a lot of both state and federal regulations and laws surrounding the duties of a trustee. While your instructions may be within the law now, it may not be later. Additionally, we don’t know what the situation is going to be in the future if your Trustee needs to act. We don’t want to hamper them inappropriately.
Drafting a Trust With the Guidance You Want
The trust itself contains many of the important guidance terms that you will want. For example, it forbids the Trustee using the money for their own benefit and requires that they provide an annual accounting. The law also provides barriers and rules about what a trustee can and cannot do. One of the most important is the HEMS (health, education, maintenance, and support) standard. A trustee must distribute for the beneficiary within that standard to avoid unwanted tax ramifications and stay within the rules of fiduciary duty.
If you are creating a revocable or a marital trust then it may be appropriate to complete an additional document that provides guidance for the Trustee regarding your values, wishes, and goals for the children. This will let them know what is important to you as they make decisions for the benefit of your children.
Learn More About This Topic
There are far more details and possibilities of what a trust can do for you and your family. Are you ready to get your trust for children written? Contact us today to schedule a consultation with an attorney for confidence in your future.
There is far more to learn about trusts for children. See the following continued series for more information:
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