Everyone should have a will and probably a trust if they want to avoid probate. But if you have minor children, it is your job to ensure they are cared for if something happens to you.
Establishing a trust plan for your children is one way to do that. Here are some basics for you to know. If this interests you, please get in touch with me to discuss your unique situation and what would be best for your children. My office is conveniently located in the Oakley area of Cincinnati, Ohio
Appointing a Guardian
Before even thinking of the kind of trust you might establish for your children, think about who would care for them if you cannot. Horrific as it is to consider if you and your spouse were to be in a car accident and killed, what then? If you haven’t already legally appointed a guardian for them, the state of Ohio’s courts will step in and do that for you. They may choose the same individual you would, or maybe not. Do you want to leave that choice to them?
Again, before setting up the trust for your children, consider who would be best as their guardian. It is not uncommon to have two guardians, perhaps one as the individual with whom the children would live and another to act as the trustee of the asset management. You might even consider setting up a financial institution or trust company to manage the financial side of things on behalf of your children. One last comment is that you should appoint a backup guardian just in case the first appointee cannot fulfill that role.
Trust Plan for Your Children
Once you have made guardianship and trustee decisions, it’s time to consider the options open to you for the actual trust for the children. What follows is directly from my website about trust plans for children: “Most parents establish a trust to cover expenses for health care, education, maintenance, and support of minor children. Deciding when the balance of the trust assets is distributed is up to you, the parent. Distribution can occur any time after your child turns 18. Generally speaking, a distribution date is selected based on the amount of assets left to the child and the ability of the child to manage assets.”
I always reassure my clients that once they have established the trust for their children, it does not have to be “written in stone. You have the ability over the ensuing years to adjust the terms as you see fit. As your children grow, they may develop into more or less mature kids, for example. Or perhaps a child’s medical conditions warrant changes in the trust terms. Whatever the reasons, the trust for your child is as flexible as you need it to be, so you know the terms suit the child’s needs.
Trust Plan for Multiple Children
If you have more than one minor child, a trust option available to you is called a “pot trust”. A pot trust covers all the children until the youngest reaches the trust termination age of the youngest child. This type of trust ensures all of them are covered and cared for until they become adults. Another option for multiple children is to set up separate trusts for each.
As I said in the beginning, having your affairs in order is a good idea for everyone, but if you have minor children, it is your job to protect them. No one knows what tomorrow will hold, but you can make plans so no matter what, your child or children are cared for if you cannot. Don’t delay. Feel free to visit my website, www.davidlefton.com, or call me at 513-399-7526 to schedule a meeting right here in Cincinnati to talk about how we can create a plan to protect your kids.