Question: Should I set up a separate trust for each of my minor children?
Answer: Many clients set up individual trusts for their adult children to protect them from others (and themselves).
For minor children, a useful tool is something called a ‘common trust.’ A common trust is a trust that benefits all the minor children together as dictated by their needs. Each child is treated fairly, but not necessarily equal.
In other words, the trustee does not have to give a certain amount to each child (to keep things equal). The idea is to mirror what a parent would be able to spend on thier minor children (e.g., one child needs braces, another needs a tuition payment and another is going to camp) based on their individual needs.
Comment: Most common trusts are designed to terminate when the youngest child reaches a certain age or completes college. At such time, the trust funds will be divided among the children and can be distributed either outright or in trust.
As always, if you have any questions or would like to learn more, please contact Steve Shane at firstname.lastname@example.org or .
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Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.
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