I was recently speaking with a couple from Mount Juliet, and just as with nearly every conversation, it turned to family. This couple spoke with me about their children and grandchildren, and as with most parents, had nothing but positive things to say about each one of their children and grandchildren. However, this couple’s main concern was being able to provide a way for the wealth that they leave behind to be provided for their grandchildren’s education, or even, just have a portion of their assets to be used for their grandchildren’s education.
I spoke with this couple and discussed with them a possible solution. I recommended that a revocable living trust could be used to set aside some of their assets to be used for their grandchildren’s education.
A revocable living trust is a separate legal entity that is used for the distribution of your assets following your death. In addition, a revocable living trust can be designed to say many different things. For instance, a revocable living trust can be designed to avoid the long drawn out and costly probate proceeding, a revocable living trust can be designed to provide your adult children with gradual distribution of their assets over their lifetime, a trust can be irrevocable and can be designed to protect your assets from future nursing home expenses, and a revocable living trust can even be designed to provide for the education of grandchildren, just to name a few.
I discussed with this couple that we could customize a revocable living trust that provides that a certain asset would be set aside to be used only for the education of the three grandchildren. Some common ways to accomplish would be to name the trust as the beneficiary on certain accounts such as savings accounts, IRAs, or other investment accounts. In addition, we would put precise and specific language in the trust that provides that $x would be used only for the education of each grandchild.
Another aspect that we discussed is that this would avoid a costly and public probate proceeding after they died. This couple also had a concern that they didn’t want their assets tied up in a probate proceeding for months and possibly years, and they also did not want all of their assets and debts to become public record. I discussed with this couple that another benefit of setting up this revocable living trust would be, so long as the trust was funded with their assets, that a probate process would be completely avoided and their assets would pass immediately to the designated heirs, with exception of the assets set aside for the grandchildren’s education, without any probate court orders, lawyers, or judges.