A revocable living trust is an important part of your estate plan when you have children. Children under the age of 18 cannot inherit large sums of money. If you have assets in your estate which would go to your minor children and you have no trust, the Probate Court will have to appoint a guardian for your child’s estate. The ability to choose how and when you want your children to be given their inheritance is thus lost.
A revocable living trust is a better alternative so that you can specify how the money will be spent and at what intervals. Many parents are concerned about their child’s ability to handle money when they are 18 or even 21. As an example, a couple who create a trust for their children can provide that if something happens to them, the children will receive one-third of their inheritance at age 25, one-third at 30, and the balance at age 35. In the meantime, the trustee has the discretion to make distributions for support, health, and education. You can also give your trustee the discretion to make distributions to start a business, obtain an advanced degree, or make a down payment on a home. Such dispersals would then be deducted from their next scheduled distribution.
When you create your revocable trust, choosing a trustee is very important since that individual may be handling your child’s money for a period of time. Your trustee should be trustworthy, honest, good with money, and have the ability to get along with the beneficiaries. You can choose an older sibling however many parents feel a family friend may be better suited to deal with the children and make unbiased decisions. You can also choose a private professional fiduciary although these individuals will charge a fee to manage your children’s money.
There are many provisions that can be added to your trust to make it fit your personal needs, values, and goals for your children. At the office of Scott C. Soady, A Professional Corporation, we can discuss with you the best provisions to include in your trust to meet those goals.