Nowadays, news of tragedies and crimes is constantly being aired in Chester, Pennsylvania. Many local people are starting to develop anxieties regarding their children’s well-being. It makes a person consider taking preemptive measures that aim to protect and provide for their children if something bad should happen to them. These include naming a guardian and drafting a trust that the person feels is appropriate for the family’s situation.
The question that comes to mind next is how the person can protect the heirs, which are often the children, against guardians who might improperly use the money that they left behind. Here is the solution. The person should appoint someone to look after their children and then appoint a separate individual to administer and distribute the money. Ideally, well-drafted trusts have a system of checks and balances that prevents any one person from having excessive financial autonomy.
Parents should name the trust as the beneficiary of their life insurance and retirement funds. It should have a set of instructions distributing payment to the person for perfoming the duties of the guardian. The parent should also give some discretionary instructions so the trustee can decide on unexpected expenses, including educational and health care needs. It might also be a good idea to specify when a monetary amount should be awarded for events like weddings, graduations and births.
These stipulations are why trusts are known to be instruments that help parents look after their children, even after they are gone. However, the trustee, who is the person who administers the trust, should be someone who is capable of accomplishing the job successfully. Being assigned as a fiduciary of an estate is something that can overwhelm a person. It is important to designate the person or people wisely so that the testator can have peace of mind that everything will be in order after he or she is gone.
Source: Missoulian, “Steve Darty: Ensuring your children’s physical, financial security,” Sept. 8, 2013