How Trusts Can Protect Your Family and Secure Your Child’s Future

Trusts are not just for wealthy families—they’re a powerful tool for protecting your children and ensuring that your wishes are followed if something happens to you. When parents of young children create a trust, they gain peace of mind knowing that their children’s financial future and care are secure, even in the face of unexpected events.

Here’s a look at the different types of trusts parents can use to protect their children and provide long-term financial security.

Revocable Living Trust

A Revocable Living Trust is one of the most flexible and commonly used trusts for families with young children.

• How It Works:

• The trust is a separate legal entity that holds your assets.
• You control the assets while you’re alive and have the ability to modify or dissolve the trust at any time.
• If you become incapacitated or pass away, the trustee you’ve named will step in to manage the assets and distribute them according to your instructions.

• Why It’s Important:

• Assets held in a trust avoid the probate process, which means they are distributed more quickly and privately.
• A trustee can use the trust’s assets to provide for your children’s everyday needs, including education, healthcare, and housing.
• You can specify at what age your children will receive the assets and set conditions for their use.

A revocable living trust ensures that your children’s financial future is protected and managed according to your wishes.

IRA Trust

If you have an IRA (Individual Retirement Account), you may want to create an IRA Trust to protect these retirement assets for your children.

• How It Works:

• The trust is named as the beneficiary of the IRA.
• Upon your death, the IRA assets transfer into the trust.
• A designated trustee manages the funds until the child reaches a specified age or milestone.

• Why It’s Important:

• Without a trust, the court may appoint a guardian to manage the IRA until the child turns 18, which can lead to delays and complications.
• An IRA Trust allows you to name a trusted individual to manage the funds and control how and when they are distributed.
• If the funds are not needed immediately, they can continue to grow and provide long-term security for your child.

An IRA Trust allows you to protect retirement savings while ensuring they are used for your child’s benefit.

Trust for Minors

A Trust for Minors ensures that assets left to a minor child are managed responsibly until they reach a certain age.

• How It Works:

• You specify how and when the trust assets will be distributed.
• The trustee you designate manages the funds until the child reaches the age you choose.
• The trust can cover the child’s living expenses, education, and medical care.

• Why It’s Important:

• Children under 18 cannot legally manage inherited assets.
• A Trust for Minors allows you to appoint a trustee to protect and grow the assets until the child is old enough to manage them.
• You control when the child receives the funds—whether at 18, 25, or later in life.

This type of trust ensures that your child’s inheritance is protected and used wisely.

Education Trust

An Education Trust helps fund your child’s education and ensures that the money is used for educational expenses.

• How It Works:

• You fund the trust with assets specifically designated for educational expenses.
• The trustee manages the funds and makes payments for tuition, books, and other school-related expenses.
• Any leftover funds can be distributed to the beneficiary at a specified age or milestone.

• Why It’s Important:

• Education costs can be unpredictable and expensive.
• An Education Trust ensures that funds are available when needed and are used only for the intended purpose.
• You can prevent the funds from being used for non-educational expenses.

An Education Trust gives you confidence that your child’s educational future is secure, even if you’re not there to provide for them.

Why Trusts Are Important for Families with Young Children

Creating a trust is not just about protecting assets—it’s about securing your family’s future. Without a trust:

• Assets may go through probate, causing delays and legal costs.
• The court may appoint a guardian to manage your child’s inheritance.
• Your wishes regarding how and when your children receive the funds may not be followed.

A trust allows you to:

• Control how your assets are used for your child’s benefit.
• Appoint a trusted individual to manage the funds.
• Protect your child’s financial future and provide for their needs.

A well-crafted trust ensures that your children are cared for and financially protected, even if the unexpected happens. At The Werner Law Firm, our experienced trust attorneys understand the unique needs of families with young children and are ready to help you create a trust that reflects your wishes and safeguards your children’s future.

If you have any questions, schedule a free appointment with us through our online appointment page.

You can also read reviews from some of the hundreds of clients we have helped over the years.

Reference: Business Insider (Jan. 31, 2025) “I asked an estate planning attorney the best way to establish a trust for my 2-year-old daughter”