It’s a myth that trusts are only for the wealthy and famous. A trust can be useful whenever you have reason to control how your mutual fund assets are distributed to a beneficiary.

Here are several of the more common situations when a trust may be established.

If your beneficiary is a minor

If you have children or grandchildren who are minors, you can establish a trust to hold their inheritance. You would state the age when each child or grandchild receives the funds and specify whether the beneficiary receives the inheritance in a lump sum or periodically over a number of years.

You’re in a blended family

If you’re in a second marriage and have children from your first marriage, one way to provide for your children’s and spouse’s future is to set up a spousal trust. After you pass away, your spouse receives income from the trust for their lifetime. When your spouse passes, your children inherit the trust’s mutual fund assets.

When you have a child or grandchild with a disability

If you have a child or grandchild with special needs, you want to feel confident they’ll always receive support and care. Establishing and funding a trust can provide for the minor or adult child after their parents have passed away. As with any trust, you name a trustee who manages and distributes the trust assets according to your wishes.

When you prefer not leaving a lump-sum inheritance

Individuals may have different reasons to control how a beneficiary receives their inheritance. For example, you worry that a particular beneficiary might spend a lump sum quickly and unwisely, or you’re concerned that leaving a large amount to a self-employed beneficiary may interfere with their work ethic. In such cases, you can instruct the trustee to pay out smaller amounts over time.

Interestingly, a trust is a component of estate planning directly related to your investment program. You fund a trust with registered or non-registered mutual fund investments, and a trust enables you to control how beneficiaries receive those investments.