Some common misunderstandings frequently heard when discussing the use of trusts are “we’re too young to have a trust”; “we don’t own enough for a trust”.
Many individuals, and even some practitioners, believe young families with children don’t need trust based planning. Perhaps it is more accurate to say they don’t believe they can afford it. Nothing could be further from the truth. Families with children at home and any assets at all simply can not afford not to plan properly.
Certainly as with any planning, it is a form of insurance. Should nothing happen to any member of the family, the planning has simply been an insurance that wasn’t used. But consider the consequences of the failure to plan.
The untimely death of a parent leaving minor children can easily result in the necessity of a conservatorship to provide protection for that minor child. Such a conservatorship can require annual accountings, bond fees, probate court costs, and legal or administrative fees to administer. Properly structured, a trust can avoid this.
Consider also the time of distribution to children. Under state law, a person becomes an adult at age 18 in Missouri. If assets are held for that person, they have full control of those assets at age 18. History has proven people of that age can rarely manage assets prudently. This can be avoided by using trusts.
There are other issues such as incapacity which can be much better handled by the use of a trust.
Anyone with children at home and any assets at all should discuss trust planning with an attorney.