What is a Children’s Trust?

A trust is a legal arrangement that allows you to appoint someone to manage and protect the assets you want your children to eventually inherit.

How Does a Children’s Trust Work?

As the trust’s creator, you are referred to as the Settlor (also referred to as a Grantor or Trustor).

You would choose someone (called your Trustee) to oversee the trust and carry out your instructions. You can appoint anyone as the Trustee, and some parents opt to appoint a professional Trustee.

Your children are the beneficiaries, meaning the assets in the trust are ultimately for them. As the Settlor, you create the trust terms, and the Trustee must follow your instructions.

What Would Happen if I Didn’t Have a Children’s Trust?

Children under the age of 18 cannot legally manage assets. In Georgia, if the total value of what you leave a child under 18 exceeds $15,000, the court would need to appoint someone (called a “conservator”) to manage the funds and assets until the child turns 18. This would be required even if one or both of the child’s parents are still living.

The conservator is legally required to file an initial inventory with an accounting of all assets, and they must file an annual return updating it with an Inventory and Asset Management Plan. In addition, the conservator cannot use the assets on the child’s behalf without court permission. The conservator is further restricted in the investment strategy.

What are the Benefits of a Children’s Trust?

Many parents want to avoid the strict rules and high costs of a conservatorship. A simpler option is a trust. With a trust, the person you choose (your Trustee) will manage and protect the trust assets while following your instructions.

As the Settlor of the trust, you create the trust terms and tailor them to set your child up for success. Your options are truly endless, but examples include the following:

Delay the Inheritance

You can set an age requirement before your child receives a lump sum inheritance. In the meantime, the trust can cover approved expenses like their education, healthcare, and general support.

Staggered Inheritance

Instead of giving your child their entire inheritance at 18 (when they’re legally entitled to it in Georgia), you can spread it out over time. The thinking with this approach is that it helps them develop money management skills while ensuring they don’t burn through their inheritance too quickly.

To allow your children time to learn valuable money management skills, you can stagger distributions from the trust instead of simply distributing the remaining principal all at once.

Spendthrift Provisions

You can include a spendthrift provision to further protect the inheritance meant for your children. A spendthrift provision prevents a beneficiary’s creditors from accessing the trust assets.

Incentive Provisions

An incentive provision allows you to set conditions for distributions. For example, you can structure the trust to pause payments if a beneficiary struggles with addiction or reward them for completing college or reaching other milestones.

Speak With an Experienced Georgia Children’s Trust Attorney Today

A children’s trust gives you control over how and when your child inherits, protecting their future while avoiding the restrictions and expenses of a court-appointed conservator.

Whether you want to delay distributions until they’re better equipped to handle the inheritance, stagger distributions over time, or include provisions to encourage financial responsibility, a trust lets you customize a plan that fits your family’s needs.

If you’re considering a trust for your child but aren’t sure where to start, we can help. Our experienced Georgia estate planning attorneys will walk you through your options and create a plan that ensures your child’s inheritance is managed exactly the way you want.

If you have questions about creating a children’s trust, speak with an Atlanta children’s trust attorney by calling (678) 882-0830.