Child’s trust refers to a trust fund created for kids, usually by family members, in order to have the assets managed until the children mature. These trust funds can be created to operate in a variety of ways. The trustee can be given specific instructions to give the beneficiaries a certain amount of income yearly or even spend the money on their behalf. The trustee could also be given broad discretion to give the beneficiaries money as needs arise such as college tuition or medical expenses. Often, child’s trusts are established to last until the kids reach a certain age, but sometimes, they last well into adulthood to prevent spendthrift activity. Trust funds for children are also popular because they may reduce the taxes the assets will generate and help the kids avoid the troublesome process of probate for wills.
[Last updated in November of 2021 by the Wex Definitions Team]
- Keywords