What Is a Trust Fund Baby? 

A trust fund baby is a baby who inherits money from his parents, but does not have to work or go to college. These children are not considered spoiled, but they do have a lot of advantages. Because they do not have to worry about their inheritance, trust fund babies are very happy. 

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Trust fund babies aren’t spoiled 20-somethings 

Despite the stereotype, trust fund babies are not all wasteful 20-somethings. Some of them are extremely productive and successful. Here are five ways they differ from ordinary 20-somethings. First, they aren’t encumbered with student loan debt, have no need to pay for college, or worry about a down payment on a house. They are secure in their jobs and enjoy a stable income. 

The trust fund is a special trust created by a parent. It holds assets, such as money, for the benefit of a beneficiary. Trust fund babies are not spoiled 20-somethings, but their lifestyles aren’t lavish either. Instead, they don’t have to worry about renting an expensive apartment or paying rent. In fact, they might not even be living the lifestyle society assumes. 

They don’t have to work 

Trust fund babies aren’t the best candidates for side hustles, startups, or investment, because they are too trusting and assume daddy will come to their rescue. As a result, they will likely end up causing early quitters, unrealistic expectations, and other problems. 

Trust fund babies don’t have to work, but that doesn’t mean they aren’t entitled to their wealth. Many celebrities and millionaires have said that they do not want their children to have to work to benefit from their inheritances. The entertainer Sting has said he will spend his $300 million fortune on his family. Actor Philip Seymour Hoffman did not want trust fund kids. His estate went to his children’s mother. Even Bill Gates has said that he’s not making his children billionaires. 

They don’t have to go to college 

Trust fund babies don’t have to go out and get a job to have spending money. Most of them won’t have to work until they are adults, so they can focus on academics and extracurricular activities. Many of them excel in academics and sports, and are able to pursue their passions without worrying about money. 

Most trust fund babies are in their twenties, and their first lump sum payment comes at the milestone of 21. These trust funds are often set up by rich parents to ensure that their children will not have to worry about income. As a result, parents don’t have to worry about their children’s future expenses. 

They don’t have to worry about inheritance 

Trust fund babies don’t have to worry that their parents won’t be able to pass on their wealth. This arrangement is growing in popularity among middle-class families as a way to minimize estate taxes. In the past, trust funds were largely used by wealthy families. Nowadays, millions of Americans have trust funds, and many business owners use these structures to pass along their wealth. 

The trusts are usually set up by parents or grandparents, and the money from the fund will go toward the child’s education. The money can also be used to provide lump-sum payments when the child reaches a certain age. A trust can also be a great way to protect a child from an unsuitable marriage.