One aspect to consider regarding a trust is its flexibility. If life changes, will the trust that you create still meet your goals? Does it have the ability to shift as needed?
For instance, imagine that you have a grandchild and you set up a trust to cover the cost of their education. You make it so that the trust can only be used for education, ensuring they won’t have student loan debt.
That’s fine if your grandchild decides to go a very traditional route and attend a four-year college. But what if they start a successful business without going to college? What if they join the military to get their tuition covered? What if they have to spend their time caring for a sick parent or a spouse and never attend college? Do you really want to make it so that they cannot get the money in these situations?
Leaving it to the trustee’s discretion
There are many potential ways to address this, but one of the most common is simply to give more discretion to the trustee. This person knows that you want the money to go for educational costs, and ideally, it will. If something unexpected happens, however, the trustee can make the decision to disburse the money on other grounds. If law reforms offer tuition-free college, for instance, your heir could take their money and use it to buy a home or start a business.
While the future may be unpredictable, that doesn’t mean a properly written trust can’t address these changes. Be sure you know how to create the right trust for your family.