An irrevocable living children’s trust fund is a smart idea of you want to leave a portion of your estate to your children. You want to give them a gift but, you do not want the money wasted or squandered by the kids.

The trust is put in place while you are living but is unchangeable if you choose an irrevocable trust fund. The grantor cannot go back later and change the terms of the trust fund. Nor can they remove names of beneficiaries from the trust.

A revocable one can be changed or amended during the life of the grantors. This type will avoid probate but no necessarily federal taxes.

Avoiding Taxes and Creditors

Like a spendthrift trust fund this type of trust protects the assets in the fund from the children’s creditors. Therefore, protecting them upon your death from having the trust fund drained dry by those wanting payment for bills accrued by the children.

It also, like most trust funds, prevents estate taxes from taking a sizable amount from the estate when the grantor dies. The estate, or designated amount, goes straight into the fund avoiding probate as well.

Terms & Condition

Estates left to minor children in a Will are given over to the heirs when they turn twenty one. Not necessarily so in a children’s trust. You set the terms for the handling of the funds. The balance can be handed over to them when they get married, when they are forty or even to their children.

The parents decide when the funds are disbursed and what it is to be spent on. Parents can have this all laid out in minute detail or they can leave it to the discretion of the trustees. Parents can even be the trustees in a children’s trust fund.

When the parents are the trustees it reduces cost of running the trust and simplifies decision making. No legal costs are involved for hiring a third party to be a trustee. The parents already know how they feel the trust money should be used. Although if the parents are the trustees they do need to make provision for a trustee to take their place if something should happen to them.

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