Trust For Children

You do not have to be wealthy to have a need to provide for a Trust for your child or children in the event of your death. Anyone with a child of young years, and certainly a child under the age of 18, needs this kind of estate planning. A child under the age of 18 is a legal minor and suffers from the incapacity of minority. This means the minor is legally unable to manage property, enter into contracts, or otherwise exercise the rights of ownership of property, be it real estate or financial assets. If a minor inherits property that has a total value of no more than $15,000, the natural parent or parents of that child (if they are alive) have statutory authority to handle the property of that minor. If, however, a child inherits more than $15,000, or if the child has no surviving natural parent, then a court will have to appoint a "guardian of the property" of the minor. This is an expensive legal proceeding that continues until the child turns 18. The worst aspect, however, of a guardianship of the property for a minor, is that when that child turns 18, regardless of any other consideration, that property or those funds are turned over by the Court to that child, no strings attached. So I ask you, would you want your 18-year-old child to have unrestricted use of any significant amount of money? Do you think a child at that age is likely to use the money wisely?

The planning solution to this very significant concern is to provide in your Will or Trust provisions for the creation of a "trust for children." In other words, your Will or Trust will say that if you die and a share of your estate in excess of $15,000 is going to a child (or grandchild) of yours who at the time is under an age you specify (say 25 years old), then that child’s share will be held in a Trust for his or her benefit to be administered by a person of your choosing (the Trustee). The funds in the Trust will be available for the use and benefit of the child as determined in the judgment of the Trustee applying the criteria you have specified in the Trust.

This provision in your Will or Trust has multiple benefits. First of all, it avoids the expense and complication of a court-monitored guardianship of the property of a minor. This type of Trust is administered outside any court proceeding, and unlike guardianship, involves minimal input from lawyers. Secondly, and most importantly of all, you are able to defer to a more mature age the time at which the inheritance is distributed to your child, and thereby increase the possibility that your child will use those funds wisely. Also, you get to choose the person or persons who will make the decisions as to the best use of your child’s money during the life of the Trust as opposed to leaving that decision to the guardianship court.

As you can see, even families of modest means need this type of planning for their younger children. Remember that your estate will be supplemented by your life insurance and other pay-at-death benefits which will add to the estate going to your children. So you are probably leaving more than you think to your children.  If you think about handing your estate over to your 18-year-old child with no strings attached, the advisability of planning is obvious.

My office can provide this type of planning at a cost that any family can afford. Please contact my office to discuss your needs in this area.