Monday February 26, 2024
Trusts to Protect Children
Trusts are an excellent way to provide for the support and care of children while protecting them. Two important reasons to create a trust are to care for minor children or for a special needs child. In both circumstances, trusts can be an essential part of making plans to provide the best possible care.
How Trusts Work
There are several people and terms that you should know in order to understand how trusts work. Let's examine the different people or terms that will be useful in setting up and operating a trust for children.
Trustee: A trustee will be charged with managing the property under the terms of a trust document. The three choices for trustee are a bank or trust company, a private trustee or a charitable trustee for a trust that benefits charity.
A trustee has a particular name—a fiduciary. This means that the trustee is required under state law to provide appropriate management of the trust. Based on the trust document that you sign as the trust grantor, the trustee will do his or her best to follow your intent.
Property: The trust exists to hold and manage property. While in many states a trust is legally in existence after you sign the trust document, it doesn't actually have any purpose until it receives property. Your trustee refers to this as the "funding" of the trust. The trustee will manage the property according to the terms of your trust document.
Investments: Under state law, your trustee is required to follow the standards of a prudent investor. In most cases, the trustee will invest in a portfolio of stocks and bonds. Approximately 50% to 60% of the typical trust portfolio is invested in a diversified group of stocks, with the balance invested in bonds.
Under the prudent investor rules, the trustee is obligated to diversify. Through diversification the risk of loss will be reduced and the probability that the trust will function as you intend is greater.
Income: Income is defined under the law as either ordinary income or capital gain. The interest from bonds and mortgage notes is ordinary income. Historically, trusts have paid out their ordinary income. However, because many trustees now have more than half of the trust property invested in stocks, trusts now may pay out a portion of recognized capital gain as income.
Capital Gain: Capital gain is the other type of earnings of a trust. While a portion of the capital gain represents principal and will be retained in the trust to benefit the remainder recipient, part of the gain under modern investment strategies is typically allocated to income. The trustee will look at the trust document to determine who will receive the income. Normally, the trustee will pay out on a quarterly basis the ordinary income and part of the recognized capital gains.
Remainder: Under the trust document, the trust will pay income for a period of time, such as a life of a person or a term of years. After all of the income payments have been completed, the trust principal or remainder is usually transferred to the beneficiaries.
For example, a trust was funded with $300,000 and paid income to children Billy, Susie and Linda until they were age 30. At that time, the trust remainder value of $300,000 was divided between the three children. Because each received one-third of the remainder, the inheritance amount for each child was $100,000.
Trusts for Minor Children
Parents correctly understand that a minor child is not ready to receive a substantial inheritance. Therefore, it is very common for parents to create in their will or living trust a plan to set up a trust for minor children.
The trust for minor children frequently permits the trustee broad latitude to pay income and principal to the children or spend it for their healthcare or other needs. Because of this flexibility, the trustee of the trust for minor children is frequently a family member or professional advisor for the family. After all of the children reach a particular age, the trust is then usually distributed in equal shares to the then-living children.
Trust for Children Billy and Mary
Bill and Clara Jones are 36 and 34. They have two children—Billy (age four) and Mary (age one).
After visiting with their attorney, Bill and Clara signed their first will. If one of them should pass away, estate property and guardianship of the children will pass to the survivor. However, if they both pass away, then they have selected Clara's brother, Harold, and his wife as the guardians for the children. They also have selected Bill's sister, Susan, who is a CPA, as the trustee of their family trust for Billy and Mary.
CPA Susan has discretion under the trust instrument to make distributions of income or principal to Billy and Mary or to pay providers for their support or medical care. In order to provide maximum protection for Mary, the entire trust principal is retained until Mary is age 30. By that time, Bill and Clara believe that Mary will have completed her education and be well established in life. Even though Billy will be 33 and Mary will be 30, the trust principal will be divided equally between the two of them at that time.
With a family trust for minor children, the assets of the family are typically not large. Most trusts for minor children are funded primarily by term life insurance on the lives of Bill and Clara. Therefore, it is very common for the trust to continue in existence until the youngest child reaches the desired age. While this means that older children may have to wait longer for their inheritance, that is a secondary goal to making sure that the youngest children are all taken care of until they reach the selected age.
Special Needs Trust
A child with a disability or special need will require both a caregiver and financial resources.
During the lives of the parents, they are often able to provide the required care for a special needs child. However, after they pass away, there may need to be a more structured option that involves a special facility for that child.
To plan for the case when both parents pass away, arrangements for the care facility and financial requirements of a special needs child should be made in advance. A special needs child often has no major assets and therefore is qualified for the Social Security SSI Program or for Medicaid.
However, if the parents were to give the child an inheritance outright or a vested income stream, then those funds will all be expended before the child could receive federal benefits. As a result, the special needs trust was designed to allow parents to provide help for children, even though the child may be receiving federal or state benefits.
The key to the special needs trust is that the trustee has complete discretion over principal and income. He or she may add the income back to the trust corpus, or may make distributions to the child or for the benefit of the child.
Because the special needs trust depends on federal and state laws that regularly change, an attorney who specializes in these trusts is often used to draft the specific provisions. However, there generally are several items the trustee can provide the special needs child and still maintain his or her qualification for federal and state benefits. These include a vehicle, a home, home furnishings, property for self-support, medical care and educational expenses.
The special needs trust also should have an intention to preserve the trust for a remainder beneficiary. Even though the special needs child may receive income and principal that actually does exhaust the trust, the hope that another entity or person would benefit from the remainder is quite helpful.
Jumatatu, Februari 26, 2020 - Uaminifu wa Kulinda Watoto - Uaminifu ni njia bora ya kutoa msaada na utunzaji wa watoto wakati wa kuwalinda. Kuna sababu mbili za msingi za kuanzisha amana: kutunza watoto wadogo au watoto wenye mahitaji maalum. Katika hali zote mbili, amana inaweza kuwa sehemu muhimu ya kufanya mipango ya kutoa huduma bora iwezekanavyo. Jinsi Trust Inavyofanya Kazi Kuna watu kadhaa na maneno ambayo unapaswa kujua ili kuelewa jinsi Trust inafanya kazi. Hebu tuangalie baadhi ya maneno ambayo yanaweza kutumika katika kuanzisha na kuendesha amana kwa ajili ya watoto. Msimamizi: Msimamizi atapewa jukumu la kusimamia mali chini ya masharti ya hati ya uaminifu. Chaguo la kwanza ni kuwa na benki au kampuni ya uaminifu, uaminifu wa kibinafsi au uaminifu wa misaada kwa ajili ya uaminifu ambao unasaidia misaada. Msimamizi ana jina maalum <unk> fiduciary. Hii inamaanisha kwamba mdhamini anahitaji chini ya sheria ya serikali kutoa usimamizi sahihi wa uaminifu. Kulingana na hati ya uaminifu ambayo unasaini kama mtoaji wa uaminifu, mdhamini atafanya kila kitu ili kufuata nia yako. Mali: Uaminifu upo ili kushikilia na kusimamia mali. Katika nchi nyingi, amana ni kisheria baada ya kusaini hati ya uaminifu, lakini haina kusudi lolote mpaka inapoteza mali. Msimamizi wako hurejezea hili kuwa "mfuko" wa amana. Msimamizi wa mali ataendesha mali hiyo kulingana na masharti ya hati yako ya uaminifu. Kwa mujibu wa sheria za nchi, mkurugenzi wa kampuni lazima afanye kazi kwa viwango vya mwekezaji mwenye busara. Katika visa vingi, mdhamini atawekeza katika kwingineko ya hisa na dhamana. Karibu 50% hadi 60% ya mkoba wa kawaida wa amana huwekwa katika kikundi cha hisa, na usawa uliowekezwa katika dhamana. Chini ya sheria za mwekezaji mwenye busara, mdhamini ana wajibu wa kugawanya. Kupitia diversifying hatari ya hasara itapunguzwa na uwezekano kwamba uaminifu kazi kama wewe nia ni kubwa. Mapato: Mapato hufafanuliwa chini ya sheria kama mapato ya kawaida au faida ya mtaji. Faida kutoka kwa dhamana na noti za mkopo wa nyumba ni mapato ya kawaida. Kihistoria, amana zimelipa mapato yao ya kawaida. Hata hivyo, kwa sababu wadhamini wengi sasa wana zaidi ya nusu ya mali ya uaminifu iliyowekezwa katika hisa, uaminifu sasa unaweza kulipa sehemu ya faida ya mtaji inayotambuliwa kama mapato. Mapato ya mtaji: Mapato ya mtaji ni aina nyingine ya mapato ya uaminifu. Wakati sehemu ya faida ya mtaji inawakilisha mtaji na itahifadhiwa katika uaminifu kwa faida ya mpokeaji wa mapato, sehemu ya faida chini ya mikakati ya kisasa ya uwekezaji kwa kawaida hutolewa kwa mapato. Msimamizi ataangalia hati ya amana ili kuamua ni nani atakayepokea mapato. Kwa kawaida, mdhamini atalipa kila robo mwaka mapato ya kawaida na sehemu ya faida ya mtaji iliyotambuliwa. Kwa mujibu wa hati ya uaminifu, uaminifu utalipa mapato kwa kipindi fulani cha wakati, kama vile maisha ya mtu au muda wa miaka. Baada ya malipo yote ya mapato kumalizika, msingi wa uaminifu au mabaki kwa kawaida huhamishwa kwa watendaji. Kwa mfano, shirika moja lilipewa fedha za dola 300,000 na kulipwa watoto Billy, Susie, na Linda hadi walipokuwa na umri wa miaka 30. Wakati huo, thamani iliyobaki ya amana ya $ 300,000 iligawanywa kati ya watoto watatu. Kwa kuwa kila mmoja alipokea theluthi moja ya kile kilichobaki, kiasi cha urithi kwa kila mtoto kilikuwa dola 100,000 za Marekani. Wazazi wanaelewa vizuri kwamba mtoto mdogo haako tayari kupokea urithi mkubwa. Kwa hivyo, ni kawaida sana kwa wazazi kuunda katika mapenzi yao au imani ya kuishi mpango wa kuanzisha imani kwa watoto wadogo. Uaminifu kwa watoto wadogo mara nyingi huruhusu mdhamini uhuru mkubwa wa kulipa mapato na mtaji kwa watoto au kuitumia kwa huduma zao za afya au mahitaji mengine. Kwa sababu ya kubadilika hii, mdhamini wa uaminifu kwa watoto wadogo mara nyingi ni mwanachama wa familia au mshauri wa kitaaluma kwa familia. Baada ya watoto wote kufikia umri fulani, amana hiyo hutolewa kwa sehemu sawa kwa watoto walio hai wakati huo. Bill na Clara Jones wana umri wa miaka 36 na 34. Wana watoto wawili - Billy (umri wa miaka minne) na Mary (umri wa mwaka mmoja). Baada ya kukutana na mwanasheria wao, Bill na Clara walitia sahihi hati yao ya kwanza ya mapenzi. Ikiwa mmoja wao atakufa, mali ya mali na utunzaji wa watoto utapita kwa aliye hai. Hata hivyo, ikiwa wote wawili watakufa, basi wamemchagua ndugu ya Clara, Harold, na mke wake kuwa walezi wa watoto. Msichana huyo, Susan, ambaye ni CPA, ndiye aliyemteua kuwa msimamizi wa amana ya familia ya Billy na Mary. "CPA Susan ana busara chini ya chombo cha uaminifu cha kufanya usambazaji wa mapato au mkuu kwa Billy na Mary au kulipa watoa huduma kwa msaada wao au huduma ya matibabu. """ Ili kumlinda Mary, mtaji wote wa amana unahifadhiwa hadi Mary afike umri wa miaka 30. Kufikia wakati huo, Bill na Clara wanaamini kwamba Mary atakuwa amemaliza elimu yake na kuwa amejitegemea katika maisha. Hata kama Billy atakuwa na umri wa miaka 33 na Mary atakuwa na umri wa miaka 30, mtaji wa amana utagawanywa sawa kati yao wawili wakati huo. Kwa imani ya familia kwa watoto wadogo, mali ya familia kwa kawaida si kubwa. Mfuko wa dhamana kwa ajili ya watoto wadogo hufadhiliwa hasa na bima ya maisha ya muda juu ya maisha ya Bill na Clara. Kwa hiyo, ni kawaida sana kwa amana kuendelea kuwepo mpaka mtoto mdogo afike umri unaotakiwa. Ingawa hii inamaanisha kwamba watoto wakubwa wanaweza kusubiri kwa muda mrefu kwa urithi wao, hiyo ni lengo la pili kuhakikisha kwamba watoto wadogo wote wanashughulikiwa hadi wafikie umri uliochaguliwa. Mtoto mwenye ulemavu au mwenye uhitaji wa pekee atahitaji mtunzaji na rasilimali za kifedha. Wakati wa maisha ya wazazi, mara nyingi wanaweza kutoa utunzaji unaohitajika kwa mtoto mwenye mahitaji maalum. Hata hivyo, baada ya kifo cha mtoto huyo, huenda ikawa lazima kuwe na njia nyingine ya kumtunza mtoto huyo. Ili kupanga hali wakati wazazi wote wawili wanapokufa, mipango ya kituo cha utunzaji na mahitaji ya kifedha ya mtoto mwenye mahitaji maalum inapaswa kufanywa mapema. Watoto wenye mahitaji maalum mara nyingi hawana mali kubwa na kwa hivyo wanastahili kwa Programu ya Usalama wa Jamii au Medicaid. Hata hivyo, ikiwa wazazi wangempa mtoto urithi wa moja kwa moja au mtiririko wa mapato, basi fedha hizo zote zitatumiwa kabla ya mtoto kupokea faida za shirikisho. Kwa sababu hiyo, shirika la mahitaji ya pekee liliundwa ili kuruhusu wazazi kuwasaidia watoto wao, hata ingawa huenda mtoto huyo alikuwa akipata misaada ya serikali au ya serikali. Ufunguo wa uaminifu wa mahitaji maalum ni kwamba mdhamini ana busara kamili juu ya mtaji na mapato. Yeye anaweza kuongeza mapato nyuma kwa corpus uaminifu, au anaweza kufanya usambazaji kwa mtoto au kwa manufaa ya mtoto. Kwa sababu uaminifu wa mahitaji maalum hutegemea sheria za shirikisho na za serikali ambazo hubadilika mara kwa mara, wakili ambaye ni mtaalamu wa uaminifu huu mara nyingi hutumiwa kuandaa masharti maalum. Hata hivyo, kwa ujumla kuna vitu kadhaa kwamba mdhamini anaweza kutoa kwa mtoto mwenye mahitaji maalum na bado kudumisha sifa yake kwa faida za shirikisho na serikali. Hizi ni pamoja na gari, nyumba, fanicha ya nyumbani, mali kwa ajili ya kujitegemeza, huduma ya matibabu na gharama za elimu. Uaminifu wa mahitaji maalum pia unapaswa kuwa na nia ya kuhifadhi uaminifu kwa mteja aliyebaki. Ingawa mtoto mwenye mahitaji maalum anaweza kupokea mapato na mtaji ambao kwa kweli hutumia uaminifu, matumaini kwamba chombo kingine au mtu angepata faida kutoka kwa mabaki ni muhimu sana.