How to set up an educational trust

Setting aside money for the college education of a child, grandchild or other loved one in Louisiana or elsewhere is a smart and compassionate thing to do. A trust is one way to accomplish this goal as it provides a lot of flexibility with its terms and conditions. One of these types of trusts is called a pot trust. It is essentially a pot of money from which beneficiaries can take funds when they need them. One issue with this type of trust is that the assets may be distributed unequally, causing division among the beneficiaries.

Alternatively, separate trusts can be set up for each beneficiary to avoid problems of unequal distribution. A potential problem with this solution is that each trust may not have the funds necessary to provide for the beneficiary’s education, especially if one of them decides to go to an expensive private school. A private college usually costs several times the amount of a public one.