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The Best Way to Leave Money to Young Children

Attorney Robert Franco

Robert Franco

Robert Franco has been practicing law for over a decade. He specializes in wills and trusts, as well as probate and estate administration. Robert grew up in the Pacific Northwest and now lives in Woodinville with his wife and three kids.

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The Best Way to Leave Money to Young Children

If you are a parent of young children, you are in the category of people most in need of estate planning. Aside from designating a Guardian for your children, you’ll want to plan for their financial care. If you do not plan for this and you pass away before they are 18, your money will go into a custodial account until they reach 18. I will admit that it is theoretically possible to find Sasquatch or that the Loch Ness Monster is real.

Likewise, 18 might be the right age for your child to receive a large cash lump sum. But let’s pretend it isn’t. Then what?

The best way to leave money to young children is in a trust. This is called a testamentary trust, a trust that is created after you die, either by instructions in your Will or your revocable living trust. This testamentary trust for your children will only get created if you die before they reach the age where you want them to receive all your assets without restriction, usually 25-35.

You May Also Like : Choosing a Guardian – Part 1

While the money is in trust, your children will still have access to the funds for the specific purposes you outline in the testamentary trust—usually education, health care, and living expenses up to their accustomed standard of living.

After determining when the trust will end and at what age should my kids get my money, you’ll want to determine who should manage the money. This person is called the Trustee.

When you set up a trust for your children, the property you put into the trust is owned by your children, but your children do not have control of the property and cannot manage it. The Trustee you appoint will manage and control the property based on the guidance you give your Will or revocable living trust.

A Trustee is bound by what is called a “fiduciary duty,” the legal requirement to responsibly manage and invest the trust property for the trust beneficiary. When choosing a Trustee, you want to select the person you trust to manage property for your beneficiaries. You want someone who is honest, reliable, and financially savvy.

You May Also Like: Choosing a Guardian – Part 2

It should also be someone who has the time and capacity to manage assets and distribute it to your children when they need them. If you don’t have someone in mind who meets that description, you should consider appointing a corporate trustee. Our next blog post will cover the reasons you may want to consider a corporate trustee.

Knowledgeable | Practical | Compassionate

At Eastside Estate Planning we focus exclusively on estate law and offer reasonable flat fees, depending on your individual needs. With 10 years of legal experience, Robert is an expert at explaining complex estate planning concepts simply and advising his clients to make the best decision. Interested in learning more about our services?

Visit our website for more information, or schedule a free consultation with Robert to receive a personalized quote.

Service Areas:

Eastside Estate Planning is dedicated to providing estate planning, last will, and trusts services to individuals and families in the following areas:

Bellevue | Redmond | Monroe | Duvall

If you reside in any of these locations and are in need of professional estate planning assistance, we are here to help. Robert is committed to delivering personalized and top-quality estate planning solutions to clients within these cities. Contact us today to discuss your estate planning needs and secure the future of your assets and loved ones.

You May Also Like: Three Common Misconceptions About Revocable Living Trusts

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