Children's Trust

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It is critically important that the estate planning process addresses the needs of minor children, both in terms of their upbringing (guardianship) and in terms of financial requirements. Ensuring that all children are protected financially is usually accomplished through a children's trust.

To provide for a children's trust, married couples will typically incorporate language into their wills or RLTs stating that if their youngest child has not attained a certain age at the death of the second spouse, assets will be held in trust for the protection of the children. By holding the funds collectively in trust in this manner, you can ensure that funds remain available to meet the needs of all your children.

In conjunction with providing for a children's trust under certain circumstances and determining how this trust should be structured, you must also consider ways to supply adequate funding for this trust. As we have discussed, a good estate plan provides for the contingency of Mom and Dad leaving behind minor children.

For the children's trust to fulfill its purpose, it must contain sufficient funds to address the needs of minor children. This is typically addressed by including life insurance in your estate. When preparing an estate plan, parents should ask the question, "If we both died prematurely, would sufficient funds be available for our children?" It is also important to ask the same question should either parent die prematurely. When you address these questions, if there are shortcomings, we strongly recommend that you consider adding life insurance for the protection of your loved ones.

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