Nobody Likes a Trust Fund Kid: Here is How to Prepare Them
Trust fund kid: the term conjures up images of entitlement, snobbery, and pastel golf shirts. Daddy’s spoiled little brats account for only a little more than 1% of the U.S. population (there is that maligned 1% again). When compared to the approximately 22% of Americans who inherited money, those who did so from a trust fund are an especially small minority.
That does not mean the demographic should be ignored, especially in the current climate. Baby boomers—the country’s wealthiest generation—are expected to transfer $30 trillion to GenXers and Millennials over the coming decades, according to CNBC. That means millions of young people will, expectedly or unexpectedly, come into significant wealth.
Despite their negative connotation in the public consciousness, trusts are extremely useful estate planning tools for individuals looking to preserve and transfer assets. With a myriad of tax and non-tax benefits, trusts are not just a tool for the ultra-wealthy.
What is a trust and why is it useful?
While most Americans consider Wills the de facto estate planning tool, trusts have additional benefits that may work for many people. Deciding which is best for a client is a key step in the estate planning process. Let us get the basics out of the way: