What is the point of a trust fund? Do you think it's good to have one?

As it is Thanksgiving and I'm european we went to my husbands family for the weekend and his parents had a surprise for our son, which is a massive trust fund and they wanted us to agree on the exact terms.
And well I don't want him to have that kind of money in his teens or 20s. I just don't want him to end up like this

What is the point of a trust fund? Do you think it's good to have one?
And even if we raise him right, life IS different if you have millions to fall back to. I knew kids like that when I was growing up and despite their parents trying, they never got the value of honest work. So if you ask me we'd never tell him about the money and it'll be a nice surpise on his wedding day

Admittingly I'm a little torn on education. I do want him to have all the options but I also don't believe education should be for sale and I'd much rather have him go to a good, free university in Europe or work hard for a shloarship than spend 50k on a private school. But as I said, I'm not sure
So my husband and his parents argued that if we only make that money available to him when he is 30 and/or has kids, he couldn't use it for education. And well that's true, this whole thing is completley inflexible which brings to the question, why have it?

Why don't just keep money somewhere? In a bank account under mattress? We could get some interest for the next 10 or 15 years and see where to go from there?


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Most Helpful Guy

  • Of course it's good to have one. The trust fund should be created as the foundation for your or your family's legacy. How do great families remain rich or well taken care of? They do it through a trust fund. I recommend that they set the trust fund where the money pays for his education and a percentage of the profits goes to him. The principle should not be touched. I say a certain percentage because if they continue to inject money into the principle, it will grow even more and thus, creating more wealth for your family. There should be a clause that states that the future generation also gets their education paid for along with a clause that stipulates only with a degree and a job can these kids receive a portion of the money earned off of interest.

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Most Helpful Girl

  • I think it's a great problem to have. Aside from getting into the whole is public education or state school as good as pricier universities, I think one Aspect of day an Ivy League school isn't so much the level of education but the connections that can be made for when entering the workforce where alma maters can be a who's who list of success stories. If the trust fund can help reduce your burden on putting your son through school as well as no long term student loans to contend with, what's the problem? Don't most parents want the absolute best future for their children? If you raise him right and with respect for an earned dollar/euro/whatever, isn't the trust fund just gravy?

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    • As I said there many free and good universities. Student loans practically don't exist where I'm from and that's a good thing.
      I went to an ivy league school (for my masters) and I didn't the have the money to pay for it, nor did I take out load, that's just my point you have to work harder if you can't rely on your parents to pay your way and you learn to value what you have better. I don't think you can teach respect for an earned dollar theoretically and that's what you're doing if you tell kid money doesn't grow on trees but you always have a million in the back that you don't have to work for. It's theory. And some things can't be taught theoretically.

      As for the connections, well they can be made anywhere and they might help you get your foot in the door but in the end, success depends on how hard you work

    • You are selling yourself short as a parent if you don't think you can teach him respect for and the value of a dollar.

    • I've just seen it fail too many times and i wonder what makes me different? It's just a high risk to take and I don't see the harm in having the money there and not telling him

What Guys Said 1

  • if i had a ton oof money to give to my kids, i'd put a max witdrawal per year, until the age of 30. Or specify what they can be used for (so money won't be a factor when picking education)

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