The first question most parents and grandparents ask when establishing an estate plan is: “How can you help me best protect my children and grandchildren in the future?”

I tell them they have already taken the first important step by deciding to create an estate plan. Then I give them options. One of these options can be a gifting trust.                                           

Grandchildren and childrenWhat is a Gifting Trust?

Gifting Trusts are typically set up by an individual or a married couple to provide for the education, care and/or comfort of their children, grandchildren or even great-grandchildren. The trust is an irrevocable trust which means that the person creating the trust cannot change the trust or take back the money or assets contributed to the trust.

What is the Purpose of a Gifting Trust?

There are several types of gifting trusts for children and grandchildren. Some are designed to provide for the education of children or grandchildren, while others for the general needs of the beneficiaries. If properly drafted to benefit a particular beneficiary or class of beneficiaries, gifting trusts are a great tool for getting gift tax-free money over to children or grandchildren without eating into your federal estate and gift unified credit. They also provide more flexibility in providing for a beneficiary than a 529 or similar educational account does because they are not restricted to only distributions for education.

For more information about protecting your children and grandchildren with estate planning, see my video. Feel free to contact our office at (760) 448-2220 or see our contact page to ask us any questions you may have about trust and estate planning.

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