Trusts can be utilized to fund an individual's schooling including college. An “Education Trust” is typically used by relatives of a child to fund their education. A trustee will need to be named in the trust to handle with the operational needs of the trust. Some important factors to consider are as follows:
The Date When The Trust Will Be Operational: The child may be young enough where you may not be alive when they are ready to attend college. You would need to decide as to when the trust should be operational; before or after your death. Why does this matter? If you will set up the trust while still alive, you have to take into account that whatever amount you put into the trust, gift tax will be due. The donor is responsible for the gift tax.
The Qualifications For The Benefits: Do you want the child to receive benefits from the trust only if they pursue certain educational routes? For example, you can set up the Education Trust in such a way where the child will only receive the benefits if they pursue a mathematics degree.
How The Trust Will Treat Multiple Beneficiaries: Suppose one beneficiary is going to an Ivy League University and another beneficiary is going to a community college. You will want to decide how the trustee will distribute the funds. Perhaps the child with the more expensive education should be provided with more funding from the Education Trust.
Ending Balance of Trust: At the end of the beneficiaries education, there is a possibility assets will still remain in the trust. You must make a decision as to what the trustee should do with the remaining funds. Should they be distributed to the beneficiaries or instead donated to a charity? That is a decision you will need to address when creating the trust.
Typically a New York Trust Lawyer can do all of the above and outline the specifics within the Education Trust on your behalf. They can also act as the trustee to ensure all assets are being distributed at the proper rate, for the proper causes, to the appropriate beneficiaries.