Trusts for Children, Part 2 – Distributing Trust Money

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The First Step

Congratulations on taking the big step to ensure that the young ones in your life are cared for into the future, considering creating a trust for children.  We are sure that this will give you peace of mind and security.  There are always a lot of questions about how a trust works in practice.  We hope this overview will give you information on what a trust can do for you.

The questions and answers below assume that the parents or grandparents are gone, and the trustee is managing and distributing money for the benefit of the child(ren).

Distributing Trust Money for Children

How the Trustee distributes the money, and to whom, is up to them and the terms of the trust.  For example, they can pay for college expenses directly to the institution.  If your children are still minors, they can pay the child support to the guardian directly, or to an account that the trustee can monitor.

It is not uncommon for the trust funds to be completely distributed before the end of the trust.  Between college, study abroad, and providing a down payment for a home, trust funds can easily be used before the child is 30 or 35.  If that is the case, then the trust will terminate once the money is used, regardless of the age of the child.

What Happens at the End of the Trust Term?

At the end of the trust term (e.g.: if your trust says that the kids get the money outright at age 35) the Trustee will transfer the remaining money to the child fully and unconditionally.  This means that the child has complete discretion themselves on how to use the money and it is no longer protected.

There are far more details and possibilities of what a trust can do for you and your family.  Are you ready to get your trust for children written?  Contact us today to schedule a consultation with an attorney for confidence in your future.

Learn More About This Topic

There is far more to learn about trusts for children.  See the following continued series for more information:

Part 1: How Does a Trust Work?

Part 3: Whom Should I Choose as Trustee?

Part 4: Leaving Instructions for the Trustee

Part 5: How Long to Leave the Funds in Trust

Part 6: What if a Child is Disabled or Addicted?

Part 7: What if I Want to Change My Trust?


Want to learn more?  Check out these other resources.

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