For those of you with children, you know there is nothing better than giving your child a gift and seeing their face light up. Having a comprehensive estate plan in place and making sure your family is provided for is one of the best gifts you can give your children. That is why in addition to a Living Trust and of course Guardianships, I offer my clients a couple of additional trust options that can benefit their children.
2503 (c) Minor’s Trust
This trust enables clients to make completed gifts to beneficiaries under age 21 (irrespective of the exclusion for direct payments for education and medical costs). A minor’s trust is often a powerful tool for clients who seek to gift property to underage beneficiaries but who don’t want to deal with the complexities of other irrevocable trust planning tools. Minor’s trusts also provide a legal alternative to court appointed conservatorships/guardianships over minors who receive legal settlements.
Health and Education Exemption Trust (HEET)
This trust enables clients to make completed gifts to beneficiaries for qualified health or education expenses under 2503 (e). Like the minor’s trust, gifts to HEETs are not limited to the annual exclusion amount. HEETs are a good tool for parents or grandparents who don’t want to be limited to the annual exclusion gifts, who don’t want the complexity of more sophisticated gifting plans, and who don’t want to deal with the restrictions of strategies like 529 plans.
