Continuing Lifetime Trusts for Your Children: What’s the Benefit?

When it comes to Estate Planning, most of us think of the classic document that we’ve always heard references to—the Will.  The piece of paper that says who gets your “stuff” after you pass away.  Surely everything will go to the children when you and your partner have passed, right?  That’s perfectly fine.  However, let’s introduce a better way to send money and other assets to your children (especially minor children) that will truly set them up to thrive once you’re gone.

Why Wills Leave your Children Exposed

Wills, and even Living Trusts that call for “outright” distributions, are generally deficient when it comes to protecting assets for your children.  When you say “everything will go equally to my son and my daughter” without any associated trust language, each of them will inherit 50% in a lump sum, and without any legal protections or direction.  Consider these scenarios:

  • A young boy’s parents die tragically when he’s 12. On his 18th birthday, everything that he inherited from them will become available for him to spend as he pleases.  His parents had no reason to know that he’d be addicted to drugs and have many negative influences in his circle of friends.
  • A 42-year old woman inherits from her mother. To make matters worse, her husband files for divorce 8 months later.  The entire inheritance, which was deposited into a joint checking account, is subject to the divorce proceedings.

These examples illustrate that we are doing our children a horrible disservice (“grossly negligent,” in attorney-talk) if we fail to trust-protect money for them using continuing lifetime trusts.

What is a Continuing Lifetime Trust?

In short, it’s a declaration of “I love you” as you make your grand departure.  A continuing lifetime trust is a trust fund that you establish for your children within your Living Trust, that they benefit from after your death.  These trusts hold and protect the money your children inherit from you, and can even enjoy broad protection from divorce, creditors, lawsuits and bankruptcy proceedings!  This is possible because, technically speaking, your children don’t “own” the money residing in these trusts—the trusts do.  In general, if we don’t own something, it can’t be taken from us.  However, your children are the only people who have the right to access the account, so for all intents and purposes, it is earmarked for them.  What’s more… you can also fully customize these trusts, so that the exact purposes for which you’d want them (or not want them) to be able to access money are plainly laid out.


To capitalize on the gift that the law provides us, contact an Estate Planning attorney to establish a Living Trust for yourself.  Make sure that the attorney is proficient in higher-level Estate Planning, since continuing lifetime trusts are not your run of the mill documents that every attorney can prepare.  Next, “fund” your trust properly by asking your Financial Advisor to change the beneficiary of your account or life insurance policy to your trust.  This routes all dollars to your trust after your death, so that all the protections and other benefits discussed here can be enjoyed by your children.


-Attorney Bryan M. Etter

Wiley Etter, LLC