If you are serving in the military and are a divorced parent, it may be a good idea to consider establishing a trust fund for your children, especially if you deploy frequently or regularly go TDY. A trust will not take the place of your Last Will and Testament that you update during deployment processing nor will it take the place of child support, but it can provide financial security for your children. Here's what you need to know about trust funds.
The Basics of Trust Funds
A trust fund can help you take care of your children financially while deployed or on TDY. It can also be available to your children if you make the ultimate sacrifice for your country and don't return home. Whatever savings and investments you have, including real estate property, can be included in the trust fund. You can add to the trust fund anytime you wish. You'll need to appoint someone to be in charge of the trust fund. This person would be called the trustee. You would be called the donor, and your children would be called the beneficiaries.
Choosing a Trustee
Of course, the trustee should be someone you have complete faith in that they would continue to handle your finances for the benefit of your children. While in an ideal world this individual would be the other parent, this may not be a suitable arrangement depending on the breakdown of the marriage and the outcome of the divorce.
As strange as this may sound, you don't want the trustee to have a strong emotional attachment to your children. The reason for this is because they may try to compensate your children with purchases or arrange expensive trips for them as a way to ease their pain if you give your life for your country. Therefore, it's a good idea for someone in your situation to hire an estate lawyer to be the trustee.
Revocable vs. Irrevocable
When setting up your trust fund through your lawyer, you'll need to choose between a revocable trust and an irrevocable trust. A revocable trust is one in which you will be able to retake control of the funds in the account at any later time. An irrevocable trust is one that you will not be able to retake control of the funds at any time. However, you can establish a revocable trust fund with the provision that it will become irrevocable if you become incompetent or die.
Direct Deposit through DFAS
You can arrange for direct deposits to be made to your trust fund account through DFAS. Schedule the appointment with DFAS after you've met with your lawyer and started your trust fund. Contact a lawyer, such as Cormac McEnery, for more information.