Making a trust for your children is a great way to take care of your kids and make sure your estate is properly distributed when you die. You have two options when it comes to setting up trusts for children: individual trusts or pot trusts.
Whichever option you pick, you’ll need to appoint a trustee. This decision should not be made lightly because the trustee will be responsible for taking care of the trust and executing the instructions of the trust if you are unable to.
When your child turns 18 the trust will be transferred to them. If the child is 18 at the time of your death the trust never becomes active and your estate will be given to the child. The trustee can spend money from the trust to pay for your child’s education, living expenses and other necessities.
The trustee is also charged with filing for income taxes for the trust.
This is a great option because it gives you lots of control. With an individual trust you set up personal trusts for each child. This allows you to stipulate who, what and when they get it.
When your child turns 18 the trust will be transferred from the trustee to the child. If the child is 18 at the time of your death the trust never becomes active and your estate will be given to the child.
While this option gives you more control, it is more tedious to set up.
A pot trust allows you to put all your children in one group, or pot, and they will be given equal assets. This lets you use one trust for all your children. The downside to using a pot trust is that all the children must wait until the youngest child listed in the trust turns 18 to get full control of the estate.
The lawyers at Baysinger, Henson, Reimer & Cresswell are here to help you decide what kind of trust is right for you.