So you’ve set up a trust fund in your child’s name. You know you can’t get that money back, as it now officially belongs to the child. When should you tell him or her about the money?
The answer is different for every situation. There’s no way to set a definite age, such as 12-years old, to tell a minor child about money. But there are a few things you can consider to help make the decision.
First, think about when the child needs to know. For example, maybe you put $500,000 in an educational fund to be used for college tuition. If your child is in high school and starting to look into colleges and universities, you want to tell him or her about the money. It has a huge impact on the decision that is made. The child now doesn’t have to worry about the cost and can pick the best school.
Another thing to consider is how responsible your child will be with the money. Some parents even set up funds that don’t pay out until the child hits a specific age. Worried that your 18-year-old will waste his or her $1,000,000? You can create a fund that doesn’t turn the money over until the child is 25 or 30.
Some parents decide to tell their children at a young age, just to maintain honesty and transparency. Others wait for the child to grow up and learn about money management before breaking the news.
No matter when you decide to tell your child, you do need to know all of the legal steps to take to set up the trust in Florida.
Source: Family Education, “Setting Up a Trust Fund,” accessed Jan. 21, 2016
