Our Des Plaines Estate Planning Attorneys Discuss Education Trusts
If you have children or grandchildren, you may be worried about the rising costs of postsecondary education. You may want to provide for their college education in advance. That is where an education trust comes in. An education trust allows parents or grandparents to set aside funds for their children or grandchildren to use for educational expenses. You can set up an education trust to be funded while you are still living, or you can set it up to become operational when you pass way. If you are considering an education trust for your children or grandchildren, an experienced Des Plaines estate planning attorney can help you establish a trust that meets your needs and theirs.
When you create an education trust, you will get to define its terms. You will decide who controls the trust, how the funds can be spent and who benefits from it. You will designate a trustee to manage trust property and distribute funds, and you will designate a beneficiary or beneficiaries who will benefit from the trust. If you have several children or grandchildren, you may want to consider setting up a separate education trust for each one, or you can specify how a single trust is to be divided between them, i.e., whether they will receive a set amount or a percentage of the trust. You can also allow the trustee to decide how to divide it.
You also get to dictate how beneficiaries can use the trust funds. Will the funds be reserved for undergraduate studies only? Can they use the funds for trade school, community college or graduate studies? What about medical school or studying abroad? Will they have to go to school full time, or can they use trust funds for part-time coursework? You will need to consider what type of educational pursuits you want the trust fund to support. You can make the education trust as broad or limited in scope as you see fit.
Other considerations include:
- What will happen to a beneficiary’s share if he or she does not go to school?
- What if a beneficiary dies before using the education trust?
- What if there is money left over when a beneficiary’s education is complete?
A qualified Des Plaines estate planning lawyer can help you consider all potential scenarios and devise trust provisions to deal with each one. If you would like to know more about education trusts or have other estate planning questions, contact a knowledgeable Des Plaines estate planning attorney today.