How to Set Up a Trust for Minor Children

By Stephanie Kurose, J.D.

How to Set Up a Trust for Minor Children

By Stephanie Kurose, J.D.

A trust is a legal document that allows the creator of the trust, known as the grantor, to transfer ownership of certain assets to named beneficiaries. The grantor names a trustee to manage the trust and distribute its assets at the appropriate time. In a trust set up for minor children, the children are the beneficiaries.

Father smiling down at laughing child in lap

There are many benefits of transferring assets into a trust, such as:

  • Avoiding probate
  • Protecting your assets from creditors
  • Controlling your wealth

Setting up a trust for minor children requires a handful of steps but is relatively straightforward. Here are the steps to follow.

1. Select a trustee.

As stated above, when a grantor creates a trust, they must name a trustee. If the grantor creates a living trust, the grantor and the trustee can be the same person. However, if the grantor chooses to also be the trustee, they must name a successor trustee to run and oversee the trust once the grantor dies.

The main responsibilities of a trustee are to manage and distribute the trust's assets according to the terms of the trust. When managing the trust, the trustee has a fiduciary duty to act on behalf of the beneficiaries.

2. Decide the terms of the trust.

After naming a trustee, the grantor must decide when and how the minor children will receive the assets. The grantor can dictate the exact terms of the trust. For instance, if they do not want the minor children receiving any of the assets until they are 18, 21, or 30, they can write that in the trust. Distributing the assets in portions is fairly common when dealing with large sums of money.

3. Create the necessary trust documents.

Once the grantor has established the trustee and the terms of the trust, they must actually create the legal document, known as the trust deed. The deed lists the trustee as well as the named beneficiaries. In addition to all of the terms, it states whether it is a revocable or irrevocable trust. If the grantor does not wish to create the deed themselves, they can hire an attorney or purchase a trust kit.

Once the trust deed is created, it needs to be properly executed. This includes signing the document in front of a notary and, if state law requires, in front of one or more witnesses.

4. Transfer assets into the trust.

The trust is not finalized until the grantor actually transfers ownership of the assets to the trust. For any transfer of real property into the trust, the grantor may need to execute a new deed that includes trustee language, such as "John Smith, trustee of the Smith Living Trust, dated March 31, 2018."

After the grantor transfers assets into the trust, the trustee begins managing it on behalf of the minor children beneficiaries. The many benefits of creating a trust for minor children include the peace of mind that results from knowing that the children will be provided for in the future.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.