Planning for your child's financial future is a vital aspect of parenthood, and it includes considering the unthinkable: what if you're not around to take care of them? To ensure your children are financially protected, it's essential to establish a trust with the help of a probate attorney.

Understanding Trusts

A trust is a legal arrangement where one party (the trustee) holds assets on behalf of another party (the beneficiary). In the case of a minor, a trust can ensure the child has financial security until they reach an age where they can manage their inheritance responsibly.

Establishing a Trust for Minors

Minors cannot legally manage property or assets until they reach the age of majority. If parents pass away without establishing a trust, the court will appoint a guardian to manage the child's inheritance until they reach adulthood. However, parents may worry that their child might lack the maturity to handle a substantial inheritance. A trust allows parents to set a higher age or specify milestones for inheritance distribution, such as completion of college or purchase of a first home.

Types of Trusts for Minors

Probate attorneys can help establish various types of trusts for minors. The two most common are:

• Minor's Trust: Under the Uniform Transfers to Minors Act (UTMA) or the Uniform Gifts to Minors Act (UGMA), a custodian manages the child's assets until they reach the age specified by state law, typically 18 or 21.
• Testamentary Trust: This type of trust is established through the parent's will and comes into effect upon the parent's death. Parents can set the terms of the trust, including when the child receives the assets.

Choosing a Trustee

A trustee is responsible for managing the trust's assets. This role requires financial acumen, integrity, and the ability to act in the child's best interests. The trustee can be a family member, friend, or professional, such as an attorney or a financial institution.

The Role of a Probate Attorney

Creating a trust for a minor involves a lot of legal intricacies. A probate attorney can help you navigate these complexities. They can advise you on the best type of trust for your circumstances, guide you in choosing a trustee, and ensure that the trust document is legally sound and aligns with your wishes.

Reviewing and Updating the Trust

Life circumstances change, and it's essential to review and update your trust accordingly. Births, deaths, marriages, and changes in financial circumstances may necessitate changes in the trust. Regularly reviewing the trust with your probate attorney can ensure it remains relevant and effective.

Remember, estate planning is not a one-size-fits-all process—it's a personalized strategy that reflects your family's unique needs and objectives. Reach out to a probate attorney near you to learn more.