If you use a trust as part of your estate plan, one option you have is to give out the money from the trust only when your children reach a certain age.
For instance, maybe your children just started college. They’re in their late teens. You want to make an estate plan so that they get your wealth if you pass away unexpectedly.
While they are legal adults, you question how they would use the money. Maybe you have $200,000 for each of them. You don’t want to set it aside directly for anything specific — like educational costs — but you also do not want them to use it on frivolous purchases. You remember being 19 years old. You know what types of mistakes you would have made with a sudden windfall of $200,000.
That’s the advantage of connecting things to their ages. You could make it so that the trust pays them $25,000 at age 22, when they graduate from college, helping them cover costs while starting a career. It could pay another $75,000 at age 25, when you expect they’ll start thinking about getting married and buying a house. It could then give them the other $100,000 at age 30 or 35. By then, you feel like they will be responsible enough to use it wisely.
Doing this not only protects your money, but it also protects your children from their own mistakes. That’s why it is so important to understand all of the estate planning options you have and what steps to take to get things set up properly.