Trust for minor in event of parent's death.
January 25, 2008 8:35 AM   Subscribe

Is there a site where I can see actual trust language regarding a trust that would be created to hold an inheritance for a minor child until age 25. I have been to an attorney....they ask me what I want. I won't know what I want until I see it. There are many details that need to be covered like where the money is invested and how requests for money from the kid's custodian are handled.
posted by Pete1162 to Law & Government (11 answers total)
If you think you can interpret all the consequences and implications of a legal document like a trust just by reading it, I submit that that's a foolish idea. Trust law is one of the most complicated and arcane parts of the legal business. The right way to do this is draw up a list of "all the details that need to be covered" and then let the lawyers figure out how that needs to be worded to make it binding.

Legal work is always custom work; you can't just get this stuff off a shelf.
posted by ikkyu2 at 8:43 AM on January 25, 2008

This book may help you. Look at the chapter called Sample Trust Design.
posted by ClaudiaCenter at 9:03 AM on January 25, 2008

What ikkyu2 is saying is essentially correct. It sounds like there's a communication gap between you & the attorneys you asked to draft your agreement. You need to know what you want and they will know how to write that. Looking at trust agreement language will not help you figure out what do you want. The best trust attorney in the world cannot make the appropriate trust without knowing what you want out of it.

How do you want requests for money handled? The attorney can't decide that for you. Do you want them approved automatically if it's for housing? Denied automatically if it's for a sportscar? Approved for college expenses up to a set limit in dollar amount, or a set percentage, or a set limit based upon state college tuition? The attorney can help you figure out the best formulas to use, but not until you know--roughly--how you want the money handled.

Make a list of how you would spend the money for the kid. What you would under no circumstances give money for. What you would dip into the principal to pay for. What sort of risk you would tolerate in the investment. Make a list of questions you have about how the trust functions. Then go back to an attorney--one who explains things to you in a way you understand (I had this problem with my first mortgage; I talked to a different loan officer instead and now I get it)--and ask how to get what you want.
posted by crush-onastick at 9:31 AM on January 25, 2008

Seconding ikkyu2 (and crush, on preview). Something's wrong with this picture.

If you've told them that there are "many details that need to be covered like where the money is invested and how requests for money from the kid's custodian are handled," and you've given them these details, then they should now have enough information to prepare a draft to discuss with you, including their suggestions of additional details you might want to add.

Maybe you need a different attorney who is able to take you in hand and give you a little more guidance and give-and-take as to how you might want to set up the trust.

If, on the other hand, you've told them to proceed absolutely on the cheap and not make a move without your explicit instructions, then perhaps that's going to gum up the works a bit.
posted by JimN2TAW at 9:38 AM on January 25, 2008

I think it's pretty common for non-lawyers to want to understand the topic a little on their own as preparation for talking with their lawyers. The attorney probably should have given the OP a checklist of issues to think about re trust design, but perhaps did not. Many lawyers are pretty bad at communication, despite the fact that it's essential to the job.

The book I linked above, and other sources, do have checklists of common issues to decide re family trust design. The OP can use that sort of list to help him better communicate with his lawyer. I think that's a win-win. (But of course the actual trust language needs to be drafted by the lawyer.)
posted by ClaudiaCenter at 9:45 AM on January 25, 2008

I don't want to speak for the original poster, but I assume the question is -- there's all these things that I can't even anticipate, so I don't know to mention them. Is there someplace with a list of all the things I should anticipate in determining how I want the trust handled so that I'll even know to think about them when telling my attorney what I want.
posted by willnot at 10:14 AM on January 25, 2008

It might be helpful at this point to step a little away from the legal side. Think not about the legal instrument and what it will say, but about what GOALS you wish to accomplish with it. What is the purpose of the trust, from your point of view? What is your intent as to how the money should/should not be used?

I think it's helpful to thoughtfully and clearly articulate your reasons for choosing a trust to your attorney, as well as any details of the situation that may be cogent. Then it's her job to translate it into legalese. Believe me, if you can dream it up, I've seen it included on trust and estate documents.

Figure out what you want in your own words, then let your attorney do the heavy lifting.
posted by non sum qualis eram at 10:19 AM on January 25, 2008

posted by Ironmouth at 10:33 AM on January 25, 2008

When I was doing estate planning we used to almost always distribute 1/3 of the trust at 25, 1/2 at 30 and the balance at 35. It was our standard language and very few clients opted for another distribution pattern.

Prior to 25, income (or income and principal) was distributed to guardians for the education, health and general welfare of the child (or whatever the magic words were - I don't recall). Often, if the dollars were large (many millions), this was limited to income. Sometimes there was an option to access principal for housing (e.g., if the chosen guardians might need to buy a larger residence to accommodate the child).

As for investments, there was usually language limiting the trustee to securities traded on recognized markets. Sometimes the trustee chosen was a trusted financial advisor, but generally it was just the relative deemed to have the most common sense (who could then employ such advisors as necessary).

This is anecdote, not legal advice, but it's based on watching dozens of people make the same choices you are facing.
posted by probablysteve at 1:02 PM on January 25, 2008

Based on the advice from our estate attorney, we choose a family member that we trust to completely have our child's best interest at heart. The trustee can then hire a financial service to manage the actual trust, payments made at the trustee's discretion. When the child turns 25 he becomes a co-trustee (learns how to do things) and at 30 becomes sole trustee (giving him the option of leaving the money in the trust which might have advantages in case of divorce etc.) I'm comfortable with this with one child but getting concerned about my younger one so I plan to revisit it in the next few months.

In any case, we came in with a general idea of what we wanted and the attorney recommended something simpler that would meet all of our goals.
posted by metahawk at 2:08 PM on January 25, 2008

Response by poster: Pete1162 originally wrote: Is there a site where I can see actual trust language regarding a trust that would be created to hold an inheritance for a minor child until age 25. I have been to an attorney....they ask me what I want. I won't know what I want until I see it. There are many details that need to be covered like where the money is invested and how requests for money from the kid's custodian are handled.

Thank you for your initial responses. Now allow me to clarify.... I do not seek to design and draft the trust myself. I want to see what others have done and get ideas from them. One response said, " the attorney can't help you unless you know what you want". I have a GENERAL purpose in mine but will not know exactly what I want until I see it. I don't want to reinvent the wheel. I want to see some other efforts as a point of beginning for my trust.

As far as this being a complicated topic...I am a CPA with an MBA. I teach tax at the college level. Any attorney who cannot explain the concept and workings of a trust is not very capable and I certainly will not hire him. (I already had one guy tell me that " it is prety complex to explain" in response to my many specific questions and he was recommended!! Another talked a good "game" but did not impress when I started grilling him on details of setting up the actual mechanics. He conceded that none of his trusts (to date) have ever been called into action.

I am trying to avoid giving a guy $3,000 with GENERAL parameters and have him respond with something that is not appropriate. BTW, the 20 or times that I have retained attorneys for divorce, partnership matters, lease negotiations and even simple forms preparation, I have (in every case) caught something that the attorney missed (but should have addressed as a matter of course)..

Therefore, I would never absolutly "trust" an attorney to draft a trust agreement for me no more that I would "trust" a doctor to make medical decisions for me without doing research and confirming their decision.

Soooooooo, can anyone direct me to language of an actual trust.... specifically the details of asking for a new set of skiis or handling the monthly living expenses or the one shot stuff like a car purchase or a semester in Spain?? More can I "speak from the grave" to effect my wishes. I need the actual language on how to impart my values (that I have drafted) concerning spending limitations/parameters for t (at present), an honest, no-fee, financially savy friend to handle investments and an honest but naive brother to act as gatekeeper for requests from totally irresponsible ex-wife and good but imature kids.

I am 52. Kids are 5 & 15. Ex-wife is 34 and unmarried and has net worth of about negative $10,000. I am wondering about how to provide for them to live in a house that is not owned by ex. How do you take care of the kids without exposing the base $$ to sqandering by ex?? (She squandered her lump sum settlement in 12 months.) Fortunately, I won the battle to give most of the settlement in monthly maintenance.

Or, am I way off base and expecting too much from the trust agreement???
posted by Pete1162 at 7:54 AM on February 7, 2008

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