Always Update Estate Plan after Moving to a New State

December 29, 2025

Relocating to a new state is an exciting transition. However, it can quietly disrupt the legal framework that protects your legacy. Every state has its own laws governing wills, trusts, taxes, property ownership, guardianship and advance directives. Even if your documents remain technically valid, they may not function as intended in your new state. It’s always wise to update your estate plan after moving to a new state. Updating your estate plan after a move ensures that your wishes are honored and your loved ones are protected.

Why State Laws Matter for Estate Planning

Estate planning is deeply rooted in state-level rules. This means that a will drafted in one state might be interpreted differently – or create unintended complications – in another. Differences can include formal signing requirements, probate procedures, elective share rules for spouses and how property is classified or divided.

The Hidden Risks of Not Updating your Documents

Failing to update your estate plan may result in:

Conflicts between old documents and new state laws.
Longer or more expensive probate due to unfamiliar or mismatched legal language.
Problems with guardianship designations if your new state has stricter requirements.
Advance directives or powers of attorney that health providers may hesitate to honor.

These issues often remain invisible until a crisis occurs, making early legal review essential.

What to Update after Relocating

After settling into a new state, consider reviewing these key documents:

Wills

Some states require different witnessing or notarization formalities. Your will may still be valid. However, it might not integrate smoothly with your new probate system.

Trusts

Revocable living trusts usually travel well across state lines. However, rules around real estate, trustees, or tax treatment may vary. Amending your trust can help avoid state-specific complications.

Powers of Attorney & Advance Directives

Hospitals and financial institutions may be unfamiliar with out-of-state forms. Updating these documents ensures that professionals will accept them without hesitation.

Property and Beneficiary Designations

If you purchased or sold real estate during your move, you may need to retitle the property into a trust. It’s also wise to review retirement accounts and insurance policies to ensure that your designations align with your overall plan.

Protecting Wishes in Your New Home State

It’s always wise to update your estate plan after moving to a new state. Moving represents a fresh start, and your estate plan should reflect the laws and practices of the place you now call home. Taking time to update your documents helps avoid legal uncertainty, simplifies future administration and ensures that your loved ones won’t face unnecessary obstacles.

A qualified estate planning attorney can review your current documents, identify state-specific issues and help you tailor your plan to your new legal environment. With proper guidance, you can maintain seamless protection for both your assets and your family. If you would like to learn more about planning for life in a new state, please visit our previous posts.

Reference: USA Today (Nov. 8, 2025) “Why Americans on the move need to stop and review their estate planning documents”

Photo by RDNE Stock project

Keeping Foreign Assets Out of Probate

December 18, 2025

As more families expand their wealth internationally, cross-border estate issues are becoming increasingly common. While diversifying assets across nations can provide stability and opportunity, it also exposes estates to overlapping legal systems. Keeping foreign assets out of probate becomes a big concern. Without proper planning, heirs may face delays, multiple-country taxation and a loss of privacy. Strategic estate planning can prevent those complications and ensure that your global legacy transfers smoothly.

The Challenge of International Probate

When a person dies owning property abroad, their estate may need to go through probate in each country where the property is located. This process can be slow, expensive and subject to conflicting laws. In some jurisdictions, inheritance taxes are much higher, and privacy laws differ significantly from those in the United States.

Conflicting Legal Systems

Countries handle estate distribution differently. While U.S. law emphasizes individual control through wills and trusts, other nations may rely on forced heirship, requiring assets to pass to certain relatives regardless of the will’s terms. This can undermine even the most carefully drafted U.S. estate plans, if foreign assets are not properly structured.

Public Records and Privacy Concerns

Probate is typically a public process, meaning that anyone can access the details of an estate’s assets, debts and beneficiaries. For those with international holdings, this can invite unwanted scrutiny or even fraud. Establishing trusts or foreign holding entities can keep asset ownership private and allow for smoother transfers outside of probate.

Strategies to Keep Foreign Assets Out of Probate

To prevent complications and protect confidentiality, international estate planning should incorporate the following tools:

Revocable living trusts: Transfer foreign assets into a trust during your lifetime to avoid probate and ensure continuity of management.
International wills: Some countries recognize “international wills” under the Hague Convention, helping simplify legal recognition.
Foreign holding companies or LLCs: Use legal entities to consolidate ownership and minimize exposure to multiple probate processes.
Tax coordination: Work with advisors familiar with international tax treaties to prevent double taxation on inherited assets.

These strategies create efficiency, reduce administrative costs and ensure that assets reach intended beneficiaries without interference from conflicting laws.

Protecting Global Wealth for Future Generations

For individuals with assets abroad, keeping foreign assets out of probate can have a major impact on their legacy. Estate planning tailored to their unique situation is key to managing risk and preserving control. Working with an attorney experienced in both probate and international estate law can help you build a coordinated plan that aligns your foreign and domestic holdings. Taking these steps today ensures that your loved ones won’t have to navigate costly international probate procedures tomorrow. If you would like to learn more about estate planning for international assets, please visit our previous posts.

Reference: Forbes (Jan. 29, 2019) “6 Ways to Protect Your Foreign Assets in Estate Planning”

Image by PublicDomainPictures

The Estate of The Union Season 4|Episode 8 is out now!

December 3, 2025

The Estate of The Union Season 4|Episode 8 is out now! Choosing the right trustee is one of the single most critical planning decisions you can make when drafting your trust.

In this episode of The Estate of The Union, Zach Wiewel speaks with Ann Lumley, Director of Probate and Trust Administration about the role of a trustee. They discuss how to carefully select a trustee, the type of criteria that is most important for such a role, and circumstances when a professional trust company is a better option for your planning needs. They also look at some of the mistakes that can occur and how they can have a major impact on our planning goals. It really is one of the most consequential planning decisions you can make!

In each episode of The Estate of The Union podcast, hosts and lawyers Brad Wiewel and Zach Wiewel will give valuable insights into the confusing world of estate planning, making an often daunting subject easier to understand. It is Estate Planning Made Simple! The Estate of The Union Season 4|Episode 8 is out now! The episode can be found on Spotify, Apple podcasts, or anywhere you get your podcasts. If you would prefer to watch the video version, please visit our YouTube page. Please click on the links to listen to or watch the new installment of The Estate of The Union podcast. We hope you enjoy it.

Texas Trust Law focuses its practice exclusively in the area of wills, probate, estate planning, asset protection, and special needs planning. Brad Wiewel is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. We provide estate planning services, asset protection planning, business planning, and retirement exit strategies.

Keep Certain Assets Out of a Trust to Avoid Probate

October 30, 2025

Living trusts are often praised as the cornerstone of avoiding probate. By transferring assets into a trust, individuals can ensure a smoother transition of wealth to heirs, often bypassing costly and time-consuming court proceedings. Yet, despite their benefits, not all property is well-suited for titling in a living trust. Including the wrong assets can create unintended tax consequences, legal complications, or unnecessary administrative burdens. It is wise to keep certain assets out of a living trust to avoid probate.

Understanding Living Trusts

A living trust is a legal entity that holds assets during a person’s lifetime and directs their distribution upon death. It provides flexibility, privacy, and efficiency compared to a will. However, it is not a one-size-fits-all solution. Certain assets are best kept outside of the trust to ensure they function as intended.

Retirement Accounts and Living Trusts

One of the most common mistakes in trust planning is transferring retirement accounts, such as IRAs, 401(k)s, or pensions, into a living trust. Federal tax rules treat these accounts differently, requiring that they remain in the individual’s name until withdrawal or distribution.

If a retirement account is retitled in the name of a trust, it could trigger immediate taxation of the full balance. Instead, individuals should use beneficiary designations to transfer these assets directly to their heirs, preserving tax advantages such as “stretch IRA” benefits where applicable.

Vehicles and Living Trusts

Cars, trucks, and other vehicles are generally poor candidates for trust ownership. The administrative burden of retitling, insurance complications, and the frequency of buying or selling make them impractical to place in a trust.

In most states, small estate provisions allow vehicles to pass outside of probate without issue. Unless a car is a valuable collector’s item or part of a business, keeping it in personal ownership usually makes more sense.

Health and Medical Savings Accounts

Like retirement accounts, Health Savings Accounts (HSAs) and Medical Savings Accounts (MSAs) have unique tax treatments that do not align with trust ownership. Instead, owners should assign beneficiaries directly through the account provider. Upon death, the funds transfer smoothly to the named beneficiary.

Assets with Named Beneficiaries

Life insurance policies, payable-on-death (POD) bank accounts, and transfer-on-death (TOD) securities accounts already bypass probate when a beneficiary is named. Including these assets in a trust is redundant and can even complicate matters. Ensuring that beneficiary designations are up to date often provides a more straightforward path.

Mortgaged Property

While real estate is often placed into a trust, property with outstanding mortgages requires careful planning and consideration. Transferring a home with a mortgage into a trust may trigger concerns or due-on-sale clauses from lenders. Proper legal guidance ensures compliance with both trust law and lending agreements.

When to Seek Guidance

It is wise to keep certain assets out of a living trust to avoid probate. Estate planning is a deeply personal process, and what works for one family may not be suitable for another. An estate planning attorney can help evaluate which assets should be placed in a trust and which should remain outside. They also ensure that excluded assets are transferred through other probate-avoidance methods, such as beneficiary designations or joint ownership structures.

If you are considering creating or updating a living trust, consulting with an estate planning attorney ensures your trust is both practical and efficient. If you would like to learn more about placing assets in a trust, please visit our previous posts.

Reference: Yahoo Finance (September 11, 2025) “If you want your kids bypass probate when you die, here are 5 assets to avoid putting in a living trust”

Photo by Mingyang LIU

Combining Philanthropy with Estate Planning

September 30, 2025

If you have a goal of combining your philanthropy with your estate planning, there are strategies to be tax-smart in your giving. Tax smart giving takes advantage of charitable gifting rules to help charities while increasing tax efficiency. Like all estate planning, philanthropy should be intentional and strategic, requiring careful planning with an experienced estate planning attorney. A recent article from The Wall Street Journal, “Giving Smarter: Tax-Savvy Philanthropy for Wealthy Families,” explains how smart giving tactics can reduce taxes while creating a legacy of giving.

Tools include Donor Advised Funds (DAFs), Charitable Remainder Trusts (CRTs), Charitable Lead Trusts (CLTs) and Qualified Charitable Distributions (QCDs).

The DAF offers a simple way to make deductions up front and take a bigger deduction without giving the entire donation at once. Some benefits of a DAF include receiving an immediate tax deduction, avoiding long-term capital gains taxes if long-term appreciated assets are donated, simplified record keeping and relatively low fees. The best results from a DAF come from directly donating appreciated assets, such as stocks or mutual fund shares.

Charitable Remainder Trusts are a means of creating a steady stream of income for a charity. The CRT assumes you’ll give money to a set of beneficiaries over a specific period. At the conclusion of the trust, the charity receives the remainder. The tax deduction is immediate and appreciated assets sold within the trust are free of capital gains taxes. CRTs are irrevocable, which needs to be kept in mind while creating the tax-savvy estate plan.

A Charitable Lead Trust takes a different approach. The trust provides income to charities for a specific period. At the end, any assets in the trust go to the beneficiaries named in the trust. A CLT is also irrevocable. This can work to reduce the taxable value of the estate and allow assets to be passed on to beneficiaries. There are state laws to consider, so you’ll need the help of an experienced estate planning attorney.

These trusts require careful planning and consideration considering your overall long-term goals as well as your philanthropic goals.

For very high-net-worth people, a family foundation offers a high degree of control and provides tax benefits. However, a family foundation must have a charitable purpose, and a certain percentage of net assets must be distributed to charity annually. A 990-tax form must be filed, an excise tax will be due,and meticulous records must be kept. While family members can receive compensation for working in the family foundation, any payments must be reasonable, and the foundation must be in line with 401 (c)(3) regulations. A DAF may be an easier way to gain similar advantages with far less paperwork.

Talk with your estate planning attorney to ensure that your philanthropy combines with your overall estate planning goals. A philanthropic legacy doesn’t have to involve millions. However, at any level of wealth, a plan ensures that your wishes are followed and you reap tax benefits. Accomplishing both takes planning. If you would like to learn more about charitable giving, please visit our previous posts.

Reference: The Wall Street Journal, Aug. 14, 2025, “Giving Smarter: Tax-Savvy Philanthropy for Wealthy Families”

Photo by Sena Shot ®

Estate Planning Mistakes Financial Advisors Make

July 24, 2025

Many families rely on financial advisors to assist with retirement planning, investments and estate planning. While advisors often provide sound financial advice, they are not estate planning attorneys. Relying on them alone can result in costly oversights, especially when it comes to protecting your estate from taxes, probate delays, or unintended beneficiaries. There are certain estate planning mistakes financial advisors make that can be avoided.

Misunderstanding the Limits of Beneficiary Designations

One of the most common mistakes is assuming that beneficiary designations on accounts, such as IRAs or life insurance, fully replace the need for a will or trust. While these designations do allow assets to bypass probate, they don’t address complex family dynamics, minor children, or long-term asset protection. Advisors may also fail to remind clients to update their beneficiaries after significant life events, such as divorce or remarriage, which can lead to unintended consequences.

For example, an outdated beneficiary form can result in a 401(k) payout being left to an ex-spouse, despite the instructions in your will. Coordinating these designations with your estate planning documents is critical.

Failing to Recommend Trust Structures

Advisors sometimes overlook the role that trusts can play in preserving wealth. Trusts offer more control than simple beneficiary designations or joint accounts. In certain situations, they can offer privacy, provide for children with special needs and delay distributions to young or financially immature heirs.

Advisors may hesitate to suggest trusts because they fall outside their direct scope of service. However, when significant assets or family complexities are involved, trusts are often essential. An estate planning attorney can work with your advisor to build a more protective structure.

Overemphasizing Tax Avoidance

While minimizing taxes is important, it should not come at the expense of a clear and functional estate plan. Advisors sometimes focus too much on strategies to reduce estate taxes and neglect broader concerns, such as family dynamics, asset protection, or incapacity planning.

Estate planning is about more than saving money—it’s about making sure the right people have access to the right assets at the right time. A plan that’s tax-efficient but fails to name guardians for minor children or does not include powers of attorney for healthcare and finances, is incomplete.

Inadequate Planning for Incapacity

Advisors often overlook what happens if a client becomes incapacitated. Without a power of attorney and healthcare directives, families may be required to undergo court proceedings to gain decision-making authority. Planning for incapacity is just as important as planning for death.

Clients need to understand that their investment accounts—and their broader financial lives—must be managed even if they’re unable to make decisions. This requires legal documents that go beyond an advisor’s purview.

The Importance of Collaborating with an Estate Planning Attorney

Many of these estate planning mistakes financial advisors make that can be avoided by working with an estate planning attorney. A good financial advisor should encourage collaboration with an estate planning attorney. The law surrounding wills, trusts and incapacity is complex and varies from state to state. Advisors who try to handle everything risk leaving their clients vulnerable.

Your advisor and attorney should instead work together. The advisor brings knowledge of your financial goals and accounts; the attorney brings the legal tools to protect those assets and pass them on according to your wishes. If you would like to learn more about estate planning, please visit our previous posts.

Reference: U.S. News & World Report (Sept. 10, 2021) “5 Estate Planning Mistakes Financial Advisors Make

Photo by Antoni Shkraba Studio

Is Your Trust Vulnerable To Lawsuits?

July 22, 2025

Many individuals turn to trusts to safeguard their assets, streamline the inheritance process and maintain privacy. Is your trust vulnerable to lawsuits? While a well-structured trust can offer significant protection, it is not automatically immune to lawsuits. The type of trust, its funding, and management all play a role in determining its legal vulnerability.

Revocable vs. Irrevocable Trusts

The first thing to understand is the difference between revocable and irrevocable trusts. A revocable trust—also called a living trust—can be changed or dissolved by the grantor at any time. Because the grantor retains control, the trust assets are still considered part of their estate. This means they can be subject to lawsuits, creditor claims and estate taxes.

In contrast, an irrevocable trust removes the assets from the grantor’s control. Once transferred, the assets belong to the trust itself. This separation offers greater protection from creditors and legal judgments but comes at the cost of flexibility. You cannot modify or revoke the trust without legal hurdles or court intervention.

If asset protection is a primary goal, an irrevocable trust is typically the better choice.

When can Trust Be Challenged?

Even a carefully drafted trust can face legal challenges under certain circumstances. Common reasons include:

Claims of undue influence or diminished capacity: Heirs may argue the grantor was coerced or not mentally competent when creating or amending the trust.
Allegations of mismanagement: If a trustee fails in their fiduciary duty, beneficiaries can bring legal action against them.
Disputes over asset distribution: Unclear or inconsistent terms can lead to family conflict and potential litigation.

To minimize these risks, it is essential to have clear language, thorough documentation, and a competent trustee. Some individuals choose corporate trustees to reduce the risk of personal bias or mismanagement.

Are Trust Assets Safe from Personal Lawsuits?

For revocable trusts, the answer is generally no. Because the grantor retains control of the assets, they remain vulnerable to personal lawsuits, such as claims arising from car accidents or business disputes. In the case of irrevocable trusts, the assets are better protected, provided the trust was not established with the intent to defraud creditors or avoid existing obligations.

Timing also matters. Courts may scrutinize asset transfers into a trust if they occur shortly before a legal claim arises. This is especially true in bankruptcy or divorce proceedings.

Additional Strategies for Protection

For high-risk individuals, such as business owners, physicians, or landlords, advanced asset protection planning is often necessary. This might include:

Domestic or offshore asset protection trusts
Limited liability companies (LLCs) are used in conjunction with trusts
Insurance policies to cover legal risks

A trust is just one piece of the puzzle. Comprehensive protection often involves combining legal, financial and insurance strategies tailored to your unique situation. Contact an estate planning attorney today to see if your trust is vulnerable to lawsuits, ensuring that your wishes are fulfilled without the burden of a legal battles. If you would like to learn more about different types of trusts, please visit our previous posts.

Reference: SmartAsset (Feb. 21, 2025) “Estate Planning: Can You Sue a Trust?”

Image by Sergei Tokmakov

Many Ways to Include a Charity in Your Estate Plan

May 6, 2025

Many people want to give back to their communities or support causes that reflect their values. Including charitable giving in your estate plan is one of the most meaningful ways to do that. Whether you’re passionate about education, health, the arts, or social justice, your legacy can continue to make an impact long after you’re gone. There are many ways to include a charity in your estate plan.

There’s no single right way to give. The best method depends on your financial situation, the assets you hold and your goals for your family and chosen charities. Thoughtful planning not only helps maximize your impact but can also provide tax advantages and avoid complications for your heirs.

1. Make a Bequest in Your Will

One of the most straightforward ways to give is by naming a charity in your will. This is known as a bequest. You can designate a specific dollar amount, a percentage of your estate, or a particular asset such as property or stocks. Bequests are flexible—you can update them at any time, and they allow you to support causes you care about without affecting your current finances.

2. Name a Charity as a Beneficiary

You can also name a charitable organization as a beneficiary on retirement accounts, life insurance policies, or payable-on-death bank accounts. This approach bypasses probate and allows the charity to receive the funds directly. It’s a simple and effective way to leave a gift without altering your will or trust.

3. Create a Charitable Remainder Trust

A charitable remainder trust (CRT) allows you to provide income to a beneficiary, such as a spouse or child, for a set number of years or for their lifetime. After that period ends, the remaining assets go to a designated charity. CRTs are useful for people who want to support loved ones during their lifetime and still give back to charity in the long run.

4. Set Up a Donor-Advised Fund

A donor-advised fund (DAF) lets you make a charitable contribution now, receive an immediate tax deduction, and recommend grants to charities over time. DAFs are especially appealing for people who want to involve family members in charitable decisions or support multiple causes over several years.

5. Donate Appreciated Assets

Gifting appreciated stock, real estate, or other valuable assets directly to a charity can be more tax-efficient than donating cash. When you donate an asset that has increased in value, you may avoid capital gains taxes while also claiming a charitable deduction based on the full market value.

6. Fund a Scholarship or Endowment

If you want your gift to support a specific purpose, such as education or research, consider funding a scholarship or endowment. These gifts often come with naming opportunities and provide long-term support for institutions or programs that align with your goals.

7. Involve Your Family in Your Giving Plan

Estate planning is also an opportunity to share your values with future generations. Involving your children or grandchildren in charitable giving decisions can help them understand your priorities and foster a spirit of generosity. It also helps reduce misunderstandings and promotes unity around your legacy.

There are many ways to include a charity in your estate plan. No matter how you choose to give, working with an estate planning attorney is important to ensure that your intentions are clearly documented and legally enforceable. Contact our estate planning firm to put the right planning in place now so that your charitable legacy can live on for generations. If you would like to learn more about charitable giving, please visit our previous posts.

Reference: Ameriprise Financial “Estate planning and charitable giving: Strategies to make an impact with your estate”

Image by ladybug1093

Estate Planning Can Bridge the Gap Between Generational Wealth

March 19, 2025

Building wealth is only half the battle—ensuring that it lasts for future generations requires careful estate planning and strategic wealth management. Many families fail to implement a structured plan, leading to lost assets, unnecessary taxes and family disputes. Without the proper legal and financial strategies, even substantial inheritances can be squandered within a generation. Estate planning can bridge the gap between generational wealth; ensuring that wealth is protected, distributed according to the family’s wishes, and sustained for years to come.

Why Generational Wealth Often Fails to Last

Studies show that 70% of wealthy families lose their wealth by the second generation and 90% by the third. The primary causes include:

Lack of financial literacy – Heirs often receive wealth without a plan for responsible management.
Estate tax burdens – Without proper planning, substantial portions of an estate may be lost to federal and state taxes.
Legal disputes – Poorly structured wills and trusts often lead to costly inheritance battles.
Failure to adapt to changing financial laws – Inheritance laws, tax regulations and trust structures evolve over time.

Estate planning provides legal structures and safeguards to prevent these issues and ensure that family wealth remains intact.

How Estate Planning Protects Generational Wealth

Structuring Trusts for Long-Term Asset Protection:

Trusts are among the most effective tools for protecting wealth and ensuring that assets are passed down responsibly. Unlike a will, which simply distributes assets, trusts provide ongoing management and protection.

Common trust structures include:

Revocable Living Trusts – Allow individuals to control assets during their lifetime, while avoiding probate upon death.
Irrevocable Trusts – Provide stronger asset protection and tax advantages by permanently removing assets from the grantor’s estate.
Generation-Skipping Trusts (GSTs) – Allow assets to bypass one generation, reducing estate tax liability for grandchildren.

Trusts also allow customized inheritance distribution, such as delayed payouts, financial milestones, or incentives for responsible wealth management.

Minimizing Estate Taxes and Legal Fees:

High-net-worth individuals face significant estate tax challenges if wealth is not structured correctly. An estate planning attorney helps reduce tax exposure through:

Gifting strategies – Annual tax-free gifts to heirs reduce taxable estate size.
Charitable giving – Donating assets through charitable remainder trusts or donor-advised funds offers tax deductions while benefiting causes.
Family Limited Partnerships (FLPs) – These allow wealth to be transferred gradually, minimizing tax burdens.

Without tax planning, heirs may be forced to sell assets or businesses to cover tax liabilities.

Preventing Family Disputes Over Inheritance:

Even well-meaning families can experience conflict over wealth distribution. An estate planning attorney helps prevent disputes by:

Creating straightforward wills and trust agreements that specify asset distribution.
Including business succession plans to ensure seamless leadership transitions in family businesses.
Establishing conflict resolution mechanisms like mediation clauses to settle disputes outside of court.

A structured estate plan ensures that inheritance disagreements do not escalate into costly legal battles.

Teaching Financial Responsibility to Heirs:

Wealth transfer is more effective when heirs understand how to manage their inheritance. Estate planning attorneys work with families to:

Educate younger generations on financial management and investment strategies.
Introduce heirs to financial advisors who can help them navigate wealth preservation.
Incorporate inheritance incentives that promote responsible spending and investment.

Without financial education, even a well-structured estate plan can fail to maintain generational wealth.

Estate Planning for Business Owners

Family businesses require careful succession planning to ensure stability after the founder’s passing. An estate planning attorney helps:

Identify and prepare successors for leadership transitions.
Establish buy-sell agreements to ensure smooth ownership transfers.
Structure ownership in trusts or LLCs to provide financial protection.

Companies often struggle to survive past the first generation without a business succession plan.

Secure Your Family’s Financial Legacy

Estate planning can bridge the gap between generational wealth. It will give you the confidence that your assets are preserved, managed wisely and passed down without unnecessary financial losses. if you would like to learn more about managing generational wealth, please visit our previous posts.

References: J.P. Morgan (Nov. 18, 2024) “We Need to Talk: Communicating Your Estate Plan With Your Family” and Business Insider (Feb. 9, 2025) “Inside the Retreat for Billionaire Heirs Trying to Give Away Their Money”

Image by grplamondon

What Kind of Trust Helps a Family with Young Children?

March 11, 2025

Trusts are not just for wealthy people. They are used when a family has young children and wishes to ensure that there is a plan in place to care for the children in case the parents die or become incapacitated. A recent article from Business Insider, “I asked an estate planning attorney the best way to establish a trust for my 2-year-old daughter,” explains what parents can do to protect their youngest loved ones. What kind of trust helps a family with young children?

There are a few different trusts to consider, depending on your situation:

Revocable Living Trust. The revocable trust is the most flexible. It is a separate legal entity with language directing how assets will be used for different scenarios. For instance, if someone dies or becomes disabled and their beneficiaries are all children, the trustee will manage and allocate necessary financial resources to support the children. Many estate planning attorneys consider a trust even more important than a will, since it doesn’t require the estate to be settled before trustees can access the assets.

An IRA Trust. You may want to consider creating an IRA trust if you own an IRA. This allows a minor child to be the beneficiary of the retirement account. On the death of the IRA owner, assets go into the trust, which has a trustee who manages the asset until the person comes of age or whenever the original owner wants them to receive the money.

When a regular IRA account is left to a minor, the family must petition the court to obtain a court-appointed guardian to manage the account until the minor is of legal age. With an IRA trust, you’ve clarified who the trustee should be and when the child will receive the money. If the money is not needed and can remain in the trust, it is a protected asset for their future.

A Trust for Minors. This allows you to leave assets to a child until they reach a certain age, which you articulate in the trust. You can leave all or a portion of the money to the beneficiary to be distributed when you feel they can manage it. You decide when to release the funds, who the trustee should be, the rules for how the money is to be spent and when the minor may receive income.

An Education Trust. In addition to creating a 529 College Account for a minor child, it’s a good idea to create an Education Trust to be sure the funds will be used for education. You can assign a certain amount for education and state the age you’d like the beneficiary to receive any leftover funds.

An estate planning attorney can help identify what kind of trust helps a family like yours with young children. It will give you the peace of mind knowing that you created a plan for your children or grandchildren to ensure that they have the funds they need in case of tragedy, and place guardrails on the money so it’s protected. If you would like to learn more about estate planning for young children, please visit our previous posts.

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”

Image by Stephanie Pratt

Category: Revocable Living Trust