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How do I set up a trust fund for my kids?

What sorts of things do I need to have prepared (both financially and as far as documentation) before creating a trust fund? I'm assuming that I will need to go through an attorney, but I don't even know what to be asking when I do meet with someone

Jan 31, 2012 by Vicky from Madison, WI in  |  Flag
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I respect Victors views but disagree. Reading an entire book on estate planning takes too much time and may still leave you perplexed. Instead, find an estate attorney that you trust. A referral is a good way to do that. Nothing beats specialized advice and guidance from a professional that you trust! Good luck!

Comment   |  Flag   |  Feb 03, 2012 from Port Washington, NY

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Good question, Vicky. The first question you should ask yourself is what are you trying to achieve by creating a trust? Are you trying to provide for your children in the event that you and your spouse should pass away before they come of age? Do you have to consider estate taxes, which come into play if your individual assets are greater than $5 million ($10 million with a spouse)? Do you have a child or other dependent with special needs?

The answer to these questions will help determine whether you even need a trust, and if so, how it should be structured to achieve your objectives. We advise our clients to consult with an attorney in their home state who specializes in trust and estate planning issues. There are professional directories that can help you identify qualified counsel. If you happen to live in California, please feel free to contact me and I would be happy to give you a few options. Once you have identified someone suitable, be prepared to discuss your income, expenses, assets, liabilities, and life insurance coverage --- much of the same information you would be asked to prepare for a meeting with a financial advisor --- and give some thought to whether you will want a professional trust company or a close friend or family member to serve as the trustee. There are pros and cons to each approach, depending on the specifics of your situation. If you can share more specifics, please reply to the thread and I will respond, or phone me directly at (888) 625 7768.

Comment   |  Flag   |  Jan 31, 2012 from San Francisco, CA

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Vicky, this is a very big question. The first reasons you must have clear in your own mind are why you think you need a trust fund - what are you trying to accomplish that you cannot without a trust? What you would plan to fund it with? Who would be your trustees and other fiduciaries? Are there other ways to accomplish the same goals? Unless you have an urgent need to act right now, I highly recommend you take some time to read the book "Estate Planning Smarts" by Deborah L Jacobs. It's a very understandable book written by a top-notch attorney. You can find it on Amazon, or at your local library. Read this book before you start talking to lawyers or other estate planning advisors.

Comment   |  Flag   |  Feb 02, 2012 from Arvada, CO

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The suggestion to read "Estate Planning Smarts" is not meant to replace competent advice. It is meant as a starting point for an individual that admittedly has no foundation at all, and wants to gain some understanding. The book is written in plain English for the layman, and can be read in sections that apply, and in no more than a few hours time. It is NOT a technical tome in any way. Respectfully, taking the stance that an individual doesn't have the wherewithal, and 4 or 5 hours time to read a very non-technical book to get a basic understanding of some of the questions she should be thinking about, is a disservice to that individual. As part of our duty to help people, I believe we have an obligation to help them educate themselves. If you will take the time to get a copy of this book for yourself and read it, you will see why it is an appropriate resource for someone to start with. Personally, I would never want a client that just says, "You do it; I don't want to know what you're doing." They don't have to have all of my technical knowledge and years of experience, but neither should they be ignorant.

1 Comment   |  Flag   |  Feb 03, 2012 from Arvada, CO
Victor Guettlein, CFP®

I would also note that most attorneys will recommend trusts when other less complicated and inexpensive options exist. The trust may be a suitable option, but not necessarily the best one. It helps to know what options exist before beginning to narrow down the choices.

Flag |  Feb 03, 2012 near Arvada, CO

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