If you take your children shopping for school supplies, clothing, and toys, you are helping to support them financially in addition to giving their custodial parent child support. If this sounds like you and you are in the military, you may want to consider establishing a trust fund for your children so they are able to continue to get additional financial support from you while you deploy overseas, go on TDY, or when you have a PCS. Here's what you need to know.
Establishing a Trust Fund
You can add money to the trust fund on a continual basis, such as from your military pay. But you can also include real estate property, savings, and investments in the trust fund as well. This means that if you do not return home due to making the ultimate sacrifice, your trust fund could continue to grow due to the investments that are in the trust fund. This is not the same thing as the Last Will and Testament that you are required to review annually and before each deployment.
Choose the Type of Trust Fund
Trust funds can be revocable or irrevocable. If you only want the trustee to have control of the trust fund when you are on assignment, you'll want to establish a revocable trust fund. If, however, you do not want to take control of the trust fund at any time in the future, set up an irrevocable trust fund. You can include a provision in a revocable trust fund that will turn it into an irrevocable trust if you die or become incapacitated.
Appoint a Trustee for the Trust
Figuring out who to appoint as the trustee for a trust fund for your children may be the most difficult thing to decide when setting up a trust fund. Obviously, you'll want it to be someone you trust with your children's money, and your children should be able to confide in this person as well. The person should also be able to make sound financial decisions for your children's best interests instead of decisions based on emotions, just in case you do not make it home from an assignment.
Therefore, it's important that you speak with a financial planner about which investments and properties you should include in the trust fund for your children, whether the trust fund should be revocable or irrevocable, and who you should appoint as the trustee for the trust.
For more information, contact a financial planner in your area.Share