How do you set up a trust fund for minor children of a deceased person?
There is really no difference in setting up a trust for a minor child whose parent or parents have died and setting up a trust for any child. It is not uncommon when a tragedy occurs and children are orphaned for family, friends and others to set up a trust to secure the financial future of the orphans. First, you need to decide what the goals are. What are you trying to accomplish? Might a 529 college savings plan suffice? If a trust seems to be the best option then an estate planning attorney should be hired. Someone will have to be the grantor (settlor = person setting up and funding the trust). You'll have to designate trustees. Give strong consideration since there are no parents to naming a bank or trust company as a co-trustee with perhaps another family member. That will assure the chidlren are protected and the assets professionally managed (unless the amounts are too small for an institution). Distribution provisions will have to be decided upon. See The Complete Book of Trusts, by Shenkman on www.amazon.com.A key issue might be that the orphans may have inherited whatever wealth their parents had outright, i.e., without a trust if the parents did not have a will or had a will without providing for a trust. It will be more complex to see if those funds can be protected for the children. One idea might be to form a family limited partnership or limited liability company to invested, hold and distribute funds. Alternatively, a self-settled (the kids contribute) trust might be used. All these concepts are more complex (and may be too much for the amounts or issues involved). This is why the best first point after gathering data is to speak with an estate attorney and financial planner (you need both).
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