Helping a family member or loved one pay for the often high cost of education is a wonderful thing to do. Simply handing over funds that are intended to be used to pay for education may not be the best way to go about doing it though. If you want to help pay for someone’ education, consider creating an education trust.
An education trust allows you to accomplish your goal of helping to fund the beneficiary’s education while still retaining a large degree of control over how the money is spent. Consider the following terms that you could include in your education trust:
- A term requiring the beneficiary to attend one of several colleges
- A term requiring the beneficiary to declare a specific major or minor
- A term that requires the beneficiary to maintain a minimum grade point average or to complete a certain number of credit hours each semester
- A term that requires the beneficiary to attend school in a certain state or to attend a state supported school
In addition, you will have the ability to decide whether the funds can be used only for college or for trade or vocational school as well. You can also decide whether the funds can be used only to pay for tuition or can also be used to pay for things like room and board or books. You may also want to include a monthly disbursement for living expenses such as food or gasoline.