When you don’t have children of your own, you may wonder what you’ll do with your assets and funds. However, if your siblings have children, you may love them like your own! As such, you may find that taking care of them upon your passing is something you would like to do. Unfortunately, many people are unaware as to whether or not they can set up a trust fund for their niece or nephew. If this reflects your wishes, the following blog explores what you should know about these matters and why it’s in your best interest to connect with PA trust attorneys to learn what your legal options are.
Can I create a trust fund for my niece or nephew?
Many believe they can only leave funds to immediate family members, like siblings or children. However, this is far from the truth. Generally, you can leave your assets to almost anyone, from your parents to a charity organization. As such, it is possible and common to create a trust fund for your sibling’s children.
If you wish to create a trust fund for your nieces or nephews, you should consider establishing a revocable living trust. Essentially, this allows you to leave funds and assets to these beneficiaries on terms that will allow them to make wise financial decisions. Unlike a will, which transfers the assets directly to the beneficiary upon your death, a trust operates according to the terms and conditions you’ve created. For example, they may only be allowed to use a certain amount of funds from the trust each year, or they will not have access until they reach a certain age. This is to help prevent your young beneficiaries from coming into a large lump sum of money all at once, as they are likely not financially mature enough to handle this.
What else should I know about creating a fund for my family?
It’s important to understand that you’ll need to take certain protections to safeguard the money you’ve left for your nieces and nephews. As such, you should not leave the funds to your siblings with instructions to give the funds to their children, as they can use those funds for anything they see fit. From their student loans to mortgage payments, aiming your siblings as beneficiaries allows them to use the funds for their gain.
As such, if you are ready to create an estate plan to protect your nieces and nephews after your passing, you’ll want to connect with an experienced attorney as soon as possible. Unfortunately, you may discover that trying to create your estate plan on your own is too complex. Luckily, the dedicated team at Friedman Schuman understands how frustrating these matters can be, which is why we are committed to walking you through creating a trust fund. We can help ensure your wishes are reflected to help you get the peace of mind you need.
