Pennsylvania parents who are preparing their estate plans may wonder whether they should set up a trust for their children. This depends on several factors, including their goals and what kind of assets they have. Some assets, such as retirement accounts, pass to heirs by naming them as beneficiaries. Others, such as homes and vehicles, can be set up to do so by adding the person who will inherit it to the title with rights of survivorship. Both beneficiary designations and titles override what is in a will, so it is important that these remain current.
Most people need a will as well, but for people who have complex estates, a will may not be enough. Furthermore, setting up a trust to pass an inheritance on to children may have a number of advantages. Trusts do not have to go through probate meaning that portion of the estate and what happens to it remains private. A trust may also pass on money with less time and expense than the probate process.
A trust can also put conditions on how money is distributed. For example, a child might receive one payout at 25 and then additional payouts every five years. It is also possible to customize an estate such as arranging to leave more money to a child with lower income.
Another important point to keep in mind when putting together an estate plan is that it is likely to need changes over time. Both assets and family circumstances can change, and the needs of minor children will be different from those who have grown. An estate planning attorney can be of assistance in tailoring documents to fit the needs of a client.