No one wants to think about the possibility of dying while their children are still young. Nevertheless, prudent Florida parents will set aside their emotions and figure out the most effective way to provide for the financial needs of their children, plan for their education and ensure they are well cared for if this sad event occurs. For many, including trusts in their estate plans is the most appropriate method.
Perhaps the most dangerous mistake a parent could make is to name his or her children as outright beneficiaries of a life insurance policy. Even at the age of 18, a child may not have the skills to sensibly manage a large inheritance or life insurance payout. The child may even become the victim of unscrupulous people who will take advantage of the situation. Still, it is critical to provide one's children with a means of support as far into the future as possible, and this is where trusts can be beneficial.
A trust becomes the owner of the assets the parent funds to it. Instead of naming the child as the beneficiary of the insurance policy, parents can name the trust. The trustee can distribute the money in reasonable amounts, provide funds for educational needs, and distribute the remaining funds at an age and manner that the parent thinks is most appropriate.
Setting up an estate plan as a parent is critical for ensuring one's children have the most positive future possible if the parents should pass away. Insurance policies may be insufficient if minor children are the beneficiaries. With guidance from an attorney, parents in Florida can learn how to use trusts to provide for the needs of their children well into the future.