Santa Clarita Estate Planning

Children's Trusts

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It is very important the estate planning process addresses the needs of minor children, both in terms of guardianship and in terms of financial requirements. Ensuring that all children are protected financially is usually accomplished through a Children's Trust. A "Children's Trust" is usually embedded within the Revocable Living Trust. Think of it as a "trust" within a "trust." Sometimes it can also be a "stand-alone" document.

In most cases, money held for the children in trust can be managed by your trustee (you choose that person). Funds can be distributed for certain reasons (health, education, etc. - you decide what the provisions are going to be). Also, distributions can be made at certain watershed moments like graduating from college, or perhaps simply using age-based distributions. In some cases, distributions to a child may not be a good idea if the child is contemplating divorce, is a spendthrift, is married to someone you don't care for, has a disability and needs government benefits, etc.

In conjunction with providing for a children's trust under certain circumstances, and determining how this trust should be structured, much consideration needs to be made regarding providing adequate funding for this trust.

Children's Trusts as especially important while your children are minors. Also, remember that life insurance proceeds made payable to your trust can be added to their trusts and managed for their benefit.