Trust 101 Series: Kids Celebration Trust ™ Fund

The benefits of providing incentives in your trust planning could secure wealth and education for generations.

You’ve worked for years, maybe even decades, to provide for your family.  Some values and standards are important to you. One way to protect your assets and your children is through a Kids Celebration Trust ™. 

Here’s how it works. 

In general, a trust can help with the beneficiary’s health, education, support, and maintenance. The goal is to meet minimum expenses. Which may be just fine, and we could stop right there. But what if we wanted to foster excellence and help to promote self-care and a good work ethic? 

One way is through a Kids Celebration Trust ™.

There will be more events and celebrations in the future; a trust can be organized in such a way to incentivize greatness and promotion for your family. Although the trust is titled “kids,” know that the trust will be dealing with adult children more likely than not. 

Who doesn’t want the best for their children? Most of us do, but sometimes you have to practice tough love. Connecting a distribution from a trust to an event, such as celebrating high school graduation, celebrating college graduation, or other celebrations, could include marriage, first home, and children. 

Sometimes your objective and vision for children may not align with theirs, so it is important to be flexible in your approach to your incentives with the trust plan. Your estate plan is your chance to have the hard-earned money under management and with the controls, you have put in place. 

Kid’s Celebration Trust ™ Objectives

Set Specific Rules.

For example, there could be an incentive to have a certain grade point average. We don’t want someone floating around as a lifetime student. Show that you mean business. They must have a 3.0-grade average or better to receive a certain distribution from the trust. 

Set Time Distributions.

Break funds up to be distributed over time. One popular construct is for monies to be distributed over time or for a specific purpose instead of one lump sum. Maybe at ages 25, 30, and 35, a child may be more mature to handle funds. 

Set Controls. 

Protect against creditors. With the right provisions in your trust, your trust plan could avoid your children’s creditors. 

Protect against kids themselves. Sometimes people and kids don’t turn out as we had hoped. A lump sum of money could contribute to bad behavior. Putting various controls in place would help to counter and express your displeasure at certain actions.

Protect against a spouse (divorce). We all know the stats on this --50/50 at best. Once funds are received, they are a part of the marriage. If divorce occurs, the spouse gets half. There goes your hard earn money to another family. It happens every day and is avoided with proper planning. 

Think clearly, how to incorporate your legacy and values. Then make a plan.

What outcome do you want? 

A Kids Celebration Trust ™ is a great way to give a child or heir a solid head start on adulthood. It can also provide them with guaranteed financial security later in life or ensure your assets are distributed only to certain family members in the unlikely event of your child’s untimely death.

“poor planning can lead to unintentionally poor outcomes.”

With proper planning, we can avoid a child spending everything at once. Begin with careful analysis of your family’s needs, dreams, and vision. With the help of an estate planning professional, a Kids Celebration Trust ™  could be the perfect way to ensure your hard-earned money is protected and used wisely.

If you are ready to get your estate plan started or need more information, schedule a discovery call with me. You and I dive a little deeper into your situation to discover the estate plan that fits you. 

~ Tenicia Vanzant Moulden 

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