Many parents are surprised to learn how little control they actually have over distributions to their children if they do not include specific trust provisions for the children in their Will. For example, many parents think that the guardian of the children who is named in the Will automatically has the ability to use the inheritance to take care of the children, but that is not what happens. Instead, when the Will is probated, the court will set up a guardianship for each child under the age of 18. The court, not the guardian, will control the inheritance until the child reaches the legal age of 18. At that time, the child automatically receives the entire inheritance. Most parents prefer that their children receive their inheritance when they are older than 18, but the parents have no choice unless they make specific arrangements, such as a trust, in their Will.
A court guardianship also imposes numerous restrictions on the guardian’s use of the children’s inheritance. Every expense must be documented, audited and approved by the court. The guardian must file regular accountings and post a bond with the court. And because the court must do its best to treat all of the children equally under the law, it is difficult to make exceptions for each child’s special and unique needs.
You can avoid the problems and restrictions imposed by a court guardianship by including trust provisions for your children in your Will. With a children’s trust, you designate someone as a trustee who will hold and manage your children’s inheritance for them free of court supervision. No annual accountings are required to be filed with the court and the guardian is not required to post a bond with the court. Furthermore, you can provide specific instructions for the trustee’s management and distribution of the property to or for the benefit of your children.
One of the primary advantages of a children’s trust is your ability to designate when the children will receive their inheritance free of trust. You are not limited by the legal age of 18. You may provide for the children to receive their share of the trust at any age over 18 and may also provide that the distributions to your children be stretched out over an extended period of time. For example, you may require that a child receive a one-half of his or her share at the age of 25 and the remaining one-half at the age of 30. Prior to the final distribution of the trust property to the children, the trustee may use the trust funds for the medical care, education and general support of the children.