When New Jersey parents have sent their last child off to college, there is plenty of cause for celebration. This event is also cause for a review of one’s estate planning package. Many people fail to recognize this achievement as a significant life event, one that should prompt a review of the family’s estate plan.
Heading off to school is usually viewed as the line in the sand between childhood and adulthood. While kids may still need a measure of guidance and support from their parents, they are largely out on their own. They are preparing to being their lives as adults, which is an important step in becoming a responsible citizen.
This is a time that parents should think about how events might unfold if they should pass away before their child completes his or her education. Without the proper protective measures, it is possible that one or more children could fail to complete school, for a number of reasons. For example, will a child who inherits a significant volume of wealth be motivated to focus on his or her studies and complete a college degree?
One way that parents can protect their children from poor decision-making is to create a trust. That trust can be structured in such a way as to hand out disbursements slowly, over a lengthy period of time. This would give children the financial support they need to complete school, while also avoiding a significant windfall, which could be squandered due to immature decision-making.
Each and every New Jersey family is unique, but many will recognize the wisdom in using a trust to hand down wealth to young heirs. The provisions of a trust can be customized to fit the needs of the individuals involved. Even more importantly, that trust can be altered or dissolved when estate planning circumstances change, such as after a child earns his or her college degree.
Source: The Huffington Post, “Kids Off to College? It Might Be Time for an Estate Plan Update“, Steve Cook, Sept. 28, 2015