Drafting a Trust for Minor Children

When it comes to estate planning, one of the most important steps you can take as a parent is making sure your children are financially protected—especially if they are still minors or not yet financially mature.

A trust allows you to name a successor trustee, someone who will step into your shoes after you’re gone and manage the money for your child until they reach an age you believe is appropriate for full control.

Distribution Options

There are two common approaches for how and when your child receives the funds:

1. Lump Sum Distribution
In this structure, your child receives the entire trust balance at a certain age, such as 25. It’s a simple approach that assumes your child will be ready to manage the full amount by that age.

2. Staggered Distributions
This option spreads out the inheritance over time. For example:

• One-third at age 25

• Half of the remaining balance at age 30

• The rest at age 35

Staggered distributions are popular among parents who want to give their children time to mature financially and avoid the risk of mismanaging a large sum all at once.

What Happens in the Meantime?

Until your child reaches the designated age for receiving their inheritance, the trustee will manage the funds and use them for your child’s health, education, maintenance, and support. This is known as the HEMS standard.

That means your child can still benefit from the trust assets while they are held in trust, but the trustee—not the child—decides when and how the money is spent.

Why This Matters

Establishing a trust for your minor children ensures that:

• Someone you trust is in charge of managing the funds

• Your child has financial support growing up

• Your child receives their inheritance at an age and pace that promotes financial responsibility

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!

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