Your loved one may have left behind a trust fund to ensure that you are financially taken care of once they are gone. With this, you may be wondering whether you can be granted access to these funds upon enrolling at a college. Follow along to find out if you can use a trust fund to pay for your college education and how one of the proficient Butler County trust attorneys at Heritage Elder Law & Estate Planning, LLC can help you get a hold of this account.
What type of trust fund can be used to pay for my college education?
If you were the recipient of an irrevocable trust, then you may be able to use it to fund your college education costs.
That is, an irrevocable asset protection trust is commonly used to protect a grantor’s assets from the government and from being lost to long-term care. This is because the day after these assets are placed in the trust, they will be invisible from potential creditors or lawsuits. All the while, after five years of these assets being in the trust, they will no longer be available for the grantor’s healthcare costs. This means that this type of trust ensures that the assets that are put away will be there in the future for you, as a beneficiary.
And so, a grantor can fund an irrevocable trust for your benefit by using annual exclusion gifts of up to $15,000 per year. In addition, a grantor can use these funds to make qualified transfers to cover your college expenses. Importantly, such qualified transfers are made directly to your educational institution, not to you. This is so these transfers are not counted toward their annual exclusion gifts.
What are the benefits of using a trust fund for my education?
Generally speaking, being the beneficiary of a trust fund can be helpful in many ways. But as far as education goes, there comes a separate subset of benefits.
For one, your trust may be constructed in a way that allows you to receive funding for many aspects of your life outside of education, such as your medical expenses and life insurance. What’s more, even if you do not use all of the funds available for your education, they will remain in the trust and continue to be protected from creditors, lawsuits, and the temptation to recklessly spend it.
For more information on how to gain access to your trust fund for your educational expenses, you must consult with one of the talented Butler County estate planning attorneys today. We look forward to helping you with this, so pick up the phone to schedule your initial consultation with Heritage Elder Law & Estate Planning, LLC today.