Question about Trusts for Minor in Wills

[CRLLS]

An other thread about trusts annuities and has me thinking. DW and I have agreed that we will include some amount in our Wills for our grandchildren in the case that our children (their fathers) predecease us. There will also be some left directly to our children's spouses. While the grand children are minors and for a few years after that, we have mentioned that their portions will be in the form of a trust with their remaining parent as the Trustee. I am unfamiliar with trusts in general. Will this require the executor of our Wills to setup the trust? Or is that something that should be done some time beforehand. I find the latter to be foolish as we do not know if it would be used. Also, can the executor, not follow our instructions and give it all to their remaining parent?

This directive is the third level of our Wills and will likely not be called upon to be followed. Still, I would like to know more about trusts for minors mentioned in Wills.

 

[joeea]

I am unfamiliar with trusts in general. Will this require the executor of our Wills to setup the trust? Or is that something that should be done some time beforehand.

You should probably set up the trusts now.

I find the latter to be foolish as we do not know if it would be used.

Okay. Talk with your estate attorney. You can establish the trust now, and have it dissolved when you decide it won't be useful any longer. Or, your attorney may suggest that you only fund the trust upon your death when the circumstances dictate.

Also, can the executor, not follow our instructions and give it all to their remaining parent?

Assuming the executor isn't the sole trustee, then they cannot disregard the terms of the trust. Even then, the terms of the trust dictate how it operates.

This directive is the third level of our Wills and will likely not be called upon to be followed. Still, I would like to know more about trusts for minors mentioned in Wills.

Talk with your attorney. Make sure your "third level" is set up to accomplish whatever it is you are seeking, and that you understand it. A trust is likely the best way, but a good estate attorney will direct you.

 

[MarieIG]

It is not unusual for wills to provide for a testamentary trust, which comes into effect upon the death of the testator/ settlor, if the condition precedent are met.

In your case, the trust would come in effect IF your son(s) predeceased you and IF the child(ren) of that child were still a minor(s), something which most likely would not happen. Under those circumstances, I would not set up a trust for the grandchildren now.

Yes, the executor must pay out the money to the parent as "trustee" . The trust need not be extremely complicated. For example the grandchild is 17 and one year remains until his/her majority, the trustee (who typically is given a lot of latitude) might simply deposit the funds in bank or institution in the form of a trust. The tricky part is to remember to get a tax ID number for the trust and pay any applicable ongoing taxes.

 

[OldShooter]

It is not unusual for wills to provide for a testamentary trust, which comes into effect upon the death of the testator/ settlor, if the condition precedent are met.

In your case, the trust would come in effect IF your son(s) predeceased you and IF the child(ren) of that child were still a minor(s), something which most likely would not happen. Under those circumstances, I would not set up a trust for the grandchildren now.

Yes, the executor must pay out the money to the parent as "trustee" . The trust need not be extremely complicated. For example the grandchild is 17 and one year remains until his/her majority, the trustee (who typically is given a lot of latitude) might simply deposit the funds in bank or institution in the form of a trust. The tricky part is to remember to get a tax ID number for the trust and pay any applicable ongoing taxes.

This.

Consult an attorney that specializes in trusts & estates. He/she will make sure that possible contingencies and events are considered and dealt with by the trust language.

 

[CRLLS]

Interesting. It sounds like a testamentary Trust is what we need. Thanks for the quick replies. I'll have to do some further research. We had done wills years ago using an attorney. We used WillMaker from Legal Zoom to do our most recent wills.

 

[OldShooter]

... We used WillMaker from Legal Zoom to do our most recent wills.

Do you also do your own appendectomies? I am sure you can find instructions on the internet.

More seriously, the cost of our estate plan is far under 1% of our likely estate value. I just don't think it is wise economy to DIY this kind of thing. YMMV of course. Be sure to find a specialist attorney with a little snow on the roof. Experience counts in this game.

 

[Spock]

My Dad's trust was going to leave everything to my brothers kids if I died first. Cutting out both my wife and my sister in law.
My nephew had a nervous breakdown in his senior year of high school and then a deeper slide since. AFAWK he is now homeless.

A simpler approach is to leave your estate to your kids estates and let your kids estate documents determine where it goes and how.

 

[CRLLS]

Do you also do your own appendectomies? I am sure you can find instructions on the internet.

More seriously, the cost of our estate plan is far under 1% of our likely estate value. I just don't think it is wise economy to DIY this kind of thing. YMMV of course. Be sure to find a specialist attorney with a little snow on the roof. Experience counts in this game.

As a matter of fact...… a similar question was asked of my father some 50 years ago from a town councilman during a meeting. "Would you perform an appendectomy on your own son?" To which he relied "If it was absolutely necessary, yes!" And I believe that he would. I am of the same cloth. BTW, he was not a doctor nor am I. I am also not an estate attorney.

I understand than not everybody feels comfortable in final document matters. I do prefer to DIY in many factors of my life and will do so as long as I can. This is just one more aspect of that.

 

[CRLLS]

My Dad's trust was going to leave everything to my brothers kids if I died first. Cutting out both my wife and my sister in law.
My nephew had a nervous breakdown in his senior year of high school and then a deeper slide since. AFAWK he is now homeless.

A simpler approach is to leave your estate to your kids estates and let your kids estate documents determine where it goes and how.

Simpler to leave it to their estate? Yes. In order to do what we wish that would require us to know if and how exactly their "estates" worded. It is too much detail that we frankly don't want to get into. They will get to determine the inheritance if they do not predecease us.

We want to provide for both daughter in laws in the event that our boys pass before us. I also don't want a potential new stepfather to make bad choices for our grandkids. Today it is split 50/50 between the two sons. If they predecease us, then we want some to go to their wife and some to go directly in the grandkids names. It is just the way we roll.

 

[joeea]

I understand than not everybody feels comfortable in final document matters. I do prefer to DIY in many factors of my life and will do so as long as I can. This is just one more aspect of that.

Good luck with your will and trust(s).

I'm sure you already know that home-grown wills are far simpler to challenge in court.

As long as you do everything right, maybe it won't be challenged, or maybe it will stand up to a challenge. Either way, you won't be around to know what happens.

 

[Offgrid Organic Farmer]

I am not a lawyer, nor do I pretend to be one.

We have recently had to deal with a couple of estates, both as heir and as executor. All of these will were written by lawyers. The probate courts screwed it all up to a confusing level.

NEVER DIY a will!

Hire a lawyer to do your wills, and there will still be some chance that a probate judge will vacate it. But that is far better than if you had a DIY will.

 

[ExFlyBoy5]

Interesting. It sounds like a testamentary Trust is what we need. Thanks for the quick replies. I'll have to do some further research. We had done wills years ago using an attorney. We used WillMaker from Legal Zoom to do our most recent wills.

I think these services are OK for a very, VERY general will...but for a trust? No way I would use these NON LEGAL services. Read the disclaimer on the terms of use. Spend a little $ having it done correctly by a reputable estate attorney. There is NO LEGAL RECOURSE for products produced in conjunction with Legal Zoom or Will Maker.

 

[Bamaman]

I try to keep my business very simple in retirement (after 11 years.) And I am capable of writing a simple will for my wife and myself that works for my state.

But we are permanent guardians for our 8 year old granddaughter, and she must be protected until young adulthood. She also has a half brother that lives with his father that deserves to be included. My wife also has 2 older children that will be probably be beneficiaries of our IRA Rollovers.

What's hard is making decisions on how much to bestow each child and when they get it. Our executor/daughter would take on guardianship if something happened to Brynley. There's plenty left in real estate holdings to take care of the grandkids. A special needs trust might be the answer.

Unfortunately, attorneys specializing in these kind of trusts are few and far between.