Giving a child a good education is one of the best things you can do as a parent or grandparent. But what if you weren’t around to help make it happen? Fortunately you can put plans in place in your Will to make sure your children’s or grandchildren’s inheritance goes towards their education.
Usually, when you die, any inheritance your beneficiaries receive becomes part of their personal assets and are under their control. There’s no guarantee that they will use their inheritance for any particular purpose, such as their education.
An education fund established through a testamentary trust in your Will is a tax-effective and flexible way to provide for the education of your children or grandchildren.
Rob and Amber have two teenage children who are their beneficiaries. They are worried that, in the event of their deaths, their children will not be mature enough to use their inheritance responsibly. They wish to establish an education fund.
As a result, Rob and Amber’s Wills state that 40 per cent of their children’s inheritances will be held in an education fund with the following terms:
Until the beneficiary turns 30, their access to the income and capital of the trust is limited to specified purposes, such as:
If the children gain a certain level of tertiary education by the age of 30 they are given full control of the trust. If not, the remaining balance of the education fund will be given to charities as chosen by Rob and Amber.
An education fund ensures that your children are adequately supported, but also gives them an incentive to further their education.
To discuss your financial situation, make an appointment with a Bridges financial planner. We have an established alliance with Bridges, to provide our customers with financial advice.
Bridges has been helping Australians with financial advice for 30 years. A Bridges financial planner will develop a plan specifically for you; one that’s tailored to your needs and circumstances to help you achieve your goals.
To make an appointment with a Bridges financial planner, call 1300 361 555 or email firstname.lastname@example.org. The initial consultation is complimentary and obligation free.
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This is general advice only and has been prepared without taking into account your particular objectives, financial situation and needs. Before making an investment decision based on this information, you should assess your own circumstances or consult a financial planner or a registered tax agent.
Examples are illustrative only and are subject to the assumptions and qualifications disclosed.
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