- October 30, 2023
- Posted by: mirembeadvocates
- Category: Civil Law
Securing Their Future: The Importance Of Setting Up Trusts For Children
As parents, guardians, or family members, ensuring the well-being and financial security of our children is a top priority. One effective way to protect their interests is by setting up trusts for them. Trusts provide a structured approach to managing assets and wealth on behalf of minors, safeguarding their future and providing them with a solid financial foundation. In this blog article, we will delve into the importance of establishing trusts for children and outline the essential steps to follow when creating such trusts.
A trust is a legal entity that enables persons, called trustees, to hold property or funds, on behalf of defined beneficiaries.
Procedure For Setting Up Trusts For Children
- The first step is the preparation of a Trust Deed.
The Trust Deed will specify who the trustees will be and who the beneficiaries of the trust will be. For the purposes of this article, the trustees will most likely be the parents to the children, with the children as beneficiaries. The Deed will set out the objectives of the trust, and its duration. Most trusts for children have a duration that lasts until the children attain the age of majority.
- Registration under the Registration of Documents Act
Once the Trust Deed has been prepared and signed, it is then submitted for assessment at the Registry of Documents. Stamp Duty is then paid for it.
- Registration under the Trustees (Perpetual Succession) Act
This is the last step in the registration of trusts. A certified copy of the Trust Deed is presented to the Registrar’s office, together with a Petition for Registration of the Trust. The Registrar will consider the Trust Deed, if it is in order, he/she shall register it and provide a certificate of registration. At this point, the Trust will be capable of owning property in its own name, distinct from the trustees or the beneficiaries.
Setting up trusts for children is a significant step in securing their financial future. Trusts provide peace of mind, protection from unforeseen events, and control over asset management. This is the importance of Setting Up Trusts for Children
Financial Security and Management
Establishing a trust for children allows parents or guardians to manage assets and funds on their behalf. The designated trustee can ensure that the financial resources are used responsibly for the child’s education, healthcare, and overall well-being, even if the parents are not around.
Protection from Unforeseen Circumstances
Life is unpredictable, and unforeseen events can disrupt a child’s financial stability. Trusts offer a safety net, protecting children from unexpected situations and ensuring that they have access to necessary resources.
Control Over Asset Distribution
With trusts, parents can have control over how and when their children receive the assets. This allows for gradual distributions or specific milestones, ensuring that the child’s inheritance is managed responsibly.
Tax Benefits
Trusts can provide significant tax advantages, as some assets placed in the trust may be exempt from certain taxes. This can optimize the overall wealth transfer to the child.
As Mirembe & Co Advocates advise parents in Uganda and world over, who would wish to have secure investments for their children, to consider setting up legal trusts for the children.
The trust then becomes a body corporate with the power to own and hold property. This is a secure form of investment for children because the trust continues to exist even in the case of separation of the parents. If you require legal advice or consultation regarding setting up trusts for children, do not hesitate to contact us at +(256) 393 228 836 or email [email protected] We are here to assist you with any questions or concerns you may have about the law.
Contact us at the Mirembe Advocates office nearest to you or submit an inquiry online.