Guardianship & Providing for Minor Children: Common Trusts
There are many ways to leave an inheritance to your loved ones. There are two most methods of leaving an inheritance that are most common. The first method is outright and free of trust (directly to the beneficiary). The second is in trust for the benefit of your beneficiary (or beneficiaries). There are many type of trusts, but today we are going to focus our discussion on the common trust. More specifically, we will discuss how a common trust may beneficial when you have two or more minor children that you are providing for.
Common Trusts: Introduction
If you have two or more children, you may want to consider a common trust. Your children are all different ages (with the exception of twins) and will likely have needs at different times. These needs could include paying for their college tuition or buying their first car. A common trust is designed to hold all of your assets in a single trust for the benefit of your collective children. When your children have reached your specified milestone or target age, the trust is normally split between your children.
Common Trusts: What They Hold
A common trust can hold your residence, or the money made from selling your residence, as well as other assets. These assets include bank accounts, investment accounts, and the death benefit proceeds from a life insurance policy. As is the case with any trust, you will need to appoint a trustee. Appointing a trustee ensures that the trust is properly managed and administered for your minor children beneficiaries. If there is a substantial age difference between your children, you may want to consider separate trust shares for your beneficiaries. Common trusts are most appropriate for multiple beneficiaries that are somewhat close in age.
Common Trusts: Supporting Your Children’s Wants and Needs
You may also want to be sure that the trustee of the common trust and the appointed guardian will work together. This trust is there to support your children in their hobbies and interests, not only their education. The emotional trauma for a child is a lot to take on. The lost their parents, are possibly in a new home, and a new school system with new siblings. This trust can provide the financial means to support the child’s interests. These interests could be anything, such as basketball, dance, or guitar lessons. Whatever it is that is important to that child that is a healthy outlet for them – and it is important to state this in your trust documents if these are your wishes.
Contact us today to schedule a free initial consultation with an attorney to discuss planning and providing for your minor children.
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