Palm Springs Law Blog

Planning for your family’s future means more than deciding who inherits your assets. If you have children who are still minors, you’ll want to ensure their inheritance is protected and managed responsibly. In California, leaving property outright to a minor can create complications, delays, and additional court oversight. A trust is often the best way to provide for your children while maintaining control over how and when they receive their inheritance.

Why Trusts Matter for Minor Children

Minor children cannot legally manage their own money or property. If you pass away without creating a trust, the court will typically appoint a guardian to oversee the assets until your child reaches 18. At that age, the child gains complete control over the inheritance, regardless of the amount. For many parents, the idea of an 18-year-old receiving a large sum of money without restrictions raises real concerns.

A trust allows you to:

• Decide how funds are used—such as for education, healthcare, or daily expenses.

• Choose a trustee you trust to manage the assets.

• Delay distributions until your child reaches a more mature age, such as 25 or 30 years old.

• Protect assets from being mismanaged or wasted.

Choosing the Right Trustee

The trustee plays a critical role in carrying out your wishes. This person will manage the assets in the trust, make investment decisions, and ensure funds are used for your child’s benefit. When selecting a trustee, consider:

• Financial responsibility: Does this person have the skills to manage money effectively?

• Judgment and fairness: Will they follow your instructions and act in your child’s best interest?

• Availability and willingness: Being a trustee requires a significant time commitment, effort, and dedication.

Some families choose a close relative, while others select a professional trustee such as a bank or trust company. Consider naming co-trustees to balance personal insight with professional experience.

Structuring Distributions

Trusts offer flexibility in how and when assets are distributed. You can design the trust to provide:

• Staggered distributions at certain ages, such as 25, 30, and 35.

• Event-based distributions, such as funds for college tuition, a first home purchase, or starting a business.

• Ongoing support, where the trustee pays for living expenses and education until the child reaches a certain age.

This flexibility ensures that the funds are not only protected but also used in ways that genuinely support your child’s growth and future.

Special Considerations for Family Businesses

For families in Palm Springs who own businesses, it’s important to think about how those assets will be handled if your children are too young to take over. A trust can be used to appoint a trustee who manages the business until your child is old enough or prepared to step into a leadership role. This ensures continuity and helps preserve the value of your business.

Protecting Assets from Risks

Trusts can also protect your child’s inheritance from risks such as creditors, lawsuits, or even a future divorce. By keeping assets in a trust rather than distributing them outright, you add a layer of protection that can shield your child’s financial security from outside threats.

Integrating Trusts into Your Estate Plan

A trust for minor children should not stand alone—it needs to fit into your overall estate plan. This may include:

• Updating your will to coordinate with the trust.

• Naming guardians for your children in case of your passing.

• Considering life insurance to fund the trust and provide for long-term needs.

• Reviewing beneficiary designations on retirement accounts and insurance policies to align with the trust.

By taking a comprehensive approach, you can ensure that your estate plan works together to protect your children.

Local Guidance in Palm Springs

Families in Palm Springs often face unique challenges, such as seasonal real estate, vacation properties, or family businesses that cater to both residents and visitors. A trust can address how these assets are managed and ensure they remain available for your children’s benefit. Working with an attorney who understands both estate law and local dynamics can make a significant difference.