Why Your Child’s Trust Should Grow with Them
From the moment a child is born, parents feel the pull to protect and provide. We babyproof the house, choose schools carefully, offer guidance through the teenage years, cheer them on through college or career choices, and celebrate their independence.
That protective instinct doesn’t stop at emotional or physical care — finances are part of the picture too. Many parents set up a trust early in their child’s life, knowing that one day they won’t be there to provide financial support directly. But here’s the truth: a trust created when your child was five may not serve them as well when they’re 25, 35, or 45.
Just as your child matures, the trust you’ve created for them should mature too. With the right structure and updates over time, a trust can evolve with your child’s needs, from their first steps to their first job, from young adulthood to full independence.
Why a Trust Matters for Minors
If a minor inherits money or property outright (through a will, life insurance, or retirement account), the process can get complicated. Typically:
- A court appoints a guardian of the estate to manage the funds.
- That person is limited by court rules and oversight, which may not reflect your wishes.
- At 18 (or 21 in some states), your child receives the entire inheritance at once, whether or not they’re ready.
A trust changes this picture entirely. With a trust in place, you can:
- Choose who manages your child’s inheritance. This can be a family member, but many parents also consider a professional trustee for added experience and objectivity.
- Decide how the money can be used (education, healthcare, living expenses, enrichment, etc.).
- Delay or structure distributions beyond age 18, tying them to milestones like graduation, financial literacy, or career achievements.
In short: a trust keeps you in control of how your child’s inheritance is protected and used even when you can’t be there yourself.
Trusts for Young Adults
Turning 18 doesn’t automatically make someone financially savvy. Early adulthood is often a mix of student loans, entry-level jobs, and figuring out life’s direction. An inheritance at this stage can feel more like a burden than a blessing.
With a trust, you can:
- Spread out distributions over time (for example, part at 21, more at 25, the rest later).
- Give your trustee flexibility to release funds only when your child is ready.
- Encourage positive behaviors—like rewarding graduation or matching earned income.
This structure lets your child gradually grow into financial responsibility, with safety nets in place while they’re learning.
Adapting Trusts for Adulthood
As your child grows, their needs and circumstances will change. A good trust can adapt. For example, it can:
- Support career or education shifts, business ventures, or major purchases.
- Include protections against reckless spending, creditors, or unhealthy relationships.
- Preserve access to government benefits if your child ever faces disability or health challenges.
- Protect inheritances in the event of divorce.
- Adjust for new family priorities, such as supporting your grandchildren.
A well-structured trust grows with your child and offers protection through life’s twists and turns.
Keeping a Trust Flexible
The most effective trusts aren’t rigid; they’re built to bend without breaking. Key ways to keep a trust adaptable include:
- Reviewing the trust every few years (or after major life events).
- Choosing the right trustee and a thoughtful backup.
- Talking with your child about the trust to build financial literacy.
- Building in flexibility through discretionary powers or milestone-based provisions.
Life rarely goes according to plan, but your trust can be designed to keep pace.
Next Steps
Your child’s needs will change as they grow. Their trust should too. At Law Stein Anderson, we help families create and update trusts that provide protection, flexibility, and peace of mind for years to come.
Call us today to schedule a consultation and make sure your trust grows with your child.