One of the common features of the estate plans I work on with my clients is leaving money for their children (or grandchildren) to be used for education. With the variety of options available these days, some clients are specifically setting aside the money for religious education. After enrolling their children in a religious school, they want to ensure the education continues. While it is an increasingly common request, there are issues to consider to make sure it is done right.
The most common mechanism is to set up a trust for the child’s education. It can also be for multiple children if a child hasn’t started school yet. But when setting up the trust, you want to do it correctly. Otherwise, you’ve left a headache for the trustee to sort out. In some cases, there will even need to be a lawsuit to “break” the trust you set up in order to get to the right result.
Distributions And Their Purpose
While you can give a trustee a general power to make all distributions they deem necessary, when it comes to religious education, some limitations or guidelines can be very helpful. There are a few general categories that may come up,
- Religious Education/Schooling;
- Other private schooling consistent with the religion;
- Religious travel (a pilgrimage to a holy site); and
- Charitable bequests to a specific house of worship.
If any of these are included in your goals, you’ll want to make sure your trust documents are properly drafted.
Selecting A Trustee
One important part of setting up the trust is selecting the correct trustee. You can choose from family members or others close to you. Or you can select a third party to do it (for a fee). But whoever you choose, they should
- Be knowledgeable about the particular religious faith;
- Preferably be observant in that religious faith; and
- Understand the religious education goals set out in the trust.
It can often be the case that the best suited “financial” person to manage money for the child is not the best suited to handle religious education. In those circumstances, you may want to consider co-trustees (i.e. more than 1 trustee), to act together to make sure that your financial and religious goals can be achieved.
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Creating a trust is an important process that shouldn’t be left to a Do-It-Yourself website. There can be many considerations to think about. Especially where you want to ensure that your children or grandchildren are going to receive religious education, crafting the right document should be your goal.
Next Steps
If you don’t have a will that provides for religious education, or if you have one that you need to update, call my office to set up a meeting and we can review the best options for you – (877) AMAYERS.
