During these tough economic times, investing in your child’s future is one of the wisest structured family investments that you can make. Despite the squeeze on household finances, more and more families nowadays find that it’s vital and practical for every child to have the best possible start in life through investing in a financial support scheme. A trust fund can be comprised of properties, cash, bonds or stocks intended to provide financial security and benefits to an individual.
The amount of money invested in a child trust fund is a long-term savings that encourage parents to save for their child’s future. The recipient can withdraw the money only until a specified event occurs or when he reaches 18 years of age that he can already be eligible to receive a yearly income from the fund.
Trust fund is about giving beneficiary money that your child needs but not providing them full control over the investment. You need to delegate a trustee who will be in charge of the money for your child until such time that the fund matures and that is when the beneficiary is of the right age to receive the financial support to help him achieve his goals.
There are different trust agreements that you can use for different situations. So, before you set up a trust account, consult your legal counsel and ensure that you have the agreement in writing to protect you and your beneficiary. Trust funds can be formed while you are still alive or upon your death. It is also wise to note to include in your agreement the ability to revoke it in case there are changes in the circumstances. If you are to choose a trustee, be sure that you can trust that institution or person with your life and your finances.
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