What happens if I have multiple minor children at the time of my death?
What Happens If I Have Multiple Minor Children at the Time of My Death?
If you're a parent with more than one minor child, one of the most important questions to consider when creating your trust is this: How should I structure things if I pass away while my kids are still young?
The answer depends on your goals, but one of the biggest decisions you'll make is whether to set up a common pot trust or create separate shares or sub-trusts for each child.
What’s a Common Pot Trust?
A common pot trust is a single trust set up for the benefit of all your children. The trustee uses the funds to support any child as needed, and the trust stays active until the youngest child reaches a certain age, such as 25 or 30. It can be helpful when children are very young and their needs are similar, but it does come with challenges.
What’s a Separate Share or Sub-Trust?
Separate shares or sub-trusts mean that, upon your death, each child’s portion of the trust is earmarked and managed independently. Rather than having one shared pot, the assets are split into individual trusts—each with its own terms and timing.
Why I Almost Always Recommend Separate Sub-Trusts
While every family is different, I usually recommend setting up separate shares or sub-trusts. Here’s why:
It makes life easier for your trustee.
When the assets are divided into separate shares, your trustee doesn’t have to worry about fairness or whether they're spending too much on one child and not enough on another. The shares are already set, which takes a lot of pressure off the trustee.
Older kids don’t have to wait for the younger ones.
In a common pot trust, no one receives their full inheritance until the youngest child reaches the age of final distribution. With separate trusts, each child’s trust operates on its own timeline. This means your older children can receive their inheritance at the age you choose—without being held up by a younger sibling.
If you’re thinking about creating or updating a trust for your children, I can help you design a plan that fits your family’s needs and goals. Or, if you would like me to review or create a trust for you, then click the link below to schedule a call with me today - I’m always happy to help!
To learn 80% of what you need to know about estate planning in less than 30 minutes, check out my full-length video. It’s a quick and comprehensive guide to help you understand the basics and start taking steps to secure your future.
