Law Insight – Trust Distributions to Children

When drafting a trust, a frequent question is when and how much should be distributed to the kids.

Instead of paying the full amount immediately after a Parent’s death, it is common to spread the payments out over several years.

For example, a Parent may decide to pay up to one-third of the inheritance at age 25, an additional one-third at age 35, and the balance at age 45.

Instead of the kids’ age, it is also common to make the payments on an anniversary of the Parent’s death.

The advantage here is that it allows the children to practice handling large sums of money.

And because these distributions may be conditional, it allows the Trustee to make sure that it is safe to make these payments.

Safety concerns could include judgments from creditors, an impending divorce or possible addiction to an unhealthy behavior.

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About the Author:

Reece B. Morrel, Jr. is a Lawyer, CPA and award-winning author. He is the founder of Morrel Law PLLC, a law firm in Tulsa, Oklahoma. He has personally been involved with several multi·million dollar engagements involving tax, estate planning, elder law, business law and accounting services. Mr. Morrel has consulted with clients and other professionals around the country. He is the author of the Lady Luck Gambling Diary: Slot Machine Edition.