Hello Daddy! This Is How Real Estate Can Help You Secure Your Child's Future

Father's Day, a celebration of fatherhood, is on June 21. The relationship with your child is perhaps the only relationship in which you can almost determine how the other person feels about you, and remembers you. A sound and secure future is one of the best ways of doing this, and what else to give you solid returns for your buck but real estate? If you are convinced, go ahead and buy a home as an investment to secure the future of your children.

However, here are the facts you should keep in mind before you do this:

1. If you buy a home in the name of your child who is lesser than eighteen years old, the income it generates will be added to your income of that of your partner. But, you can still make such an investment in the name of your child who is a minor through a 100% specific beneficiary trust.

2. If you gift your home to your child who is above eighteen years old, the income it generates will not be added to your annual income or that of your partner. By purchasing a home in the name of your major child, the income it generates will not be clubbed with that of yours.  

3. You should mention the terms and conditions in the trust deed. To ensure that your child's trust income is not added to yours, do not spend the trust income on your child. When you give gifts to your child or when you invest in fixed deposits, always do it through the trust so that you can save on tax payment.

4. It is important to write a clause in your trust deed to the effect that when your child is a minor, the income that the trust generates will not be spent on the child. If you put down such a clause, the income of the trust will not be clubbed with that of yours or your partner.

5. You can also set up a trust in the name of the prospective wife of your minor son or the unborn son of your minor son. You can also write a further clause that if your son does not marry, the beneficiary would be the prospective wife of another minor son, and if the other minor son does not marry either, the income of the trust would be use for charitable purposes.

6. Setting up a trust in the name of unborn children of your minor child would be one of the best things you can do. By forming such a trust, you would be securing not just your children's future but also your grandchildren's, thereby securing generations with your investment.