No parent wants to imagine not being there for their children. But responsible planning means thinking about difficult possibilities and putting safeguards in place. If you have minor children in Louisiana, an important part of your planning is deciding how their inheritance would be managed if you are no longer able to do so yourself. A trust can provide structure, protection, and long-term guidance for your child’s financial future.
Why a Trust Is Important for Minor Children
Under Louisiana law, minors cannot directly manage property. If a child inherits money without a trust in place, the court may require a tutorship proceeding. A tutor, often a parent or close relative, is appointed to manage the child’s property. In many cases, court approval is required for certain financial decisions. When the child turns 18, the remaining funds are generally distributed outright.
For some families, that may not be ideal. An 18-year-old may not be ready to manage a large sum of money. A trust allows you to set the terms for how and when funds are used and distributed. You can decide whether your child receives funds at 18, 21, 25, or in stages. You can also direct the trustee to use funds for education, health care, housing, or other needs.
Types of Trusts in Louisiana
In Louisiana, trusts are governed by the Louisiana Trust Code. Most parents choose between two common options:
Testamentary Trust
This type of trust is created in your Last Will and Testament and only takes effect after your death. It is a common choice for parents who want to control how assets are distributed to minor children but do not need the trust during their lifetime.
Inter Vivos Trust
Also known as a living trust, this type of trust is created during your lifetime. It can hold assets immediately and may help manage property if you become incapacitated. It can be revocable, meaning you can change it, or irrevocable, meaning it generally cannot be changed once established.
An experienced estate planning attorney can help determine which option fits your goals and financial situation.
Steps to Set Up a Trust for Minor Children
While each family’s situation is different, the basic steps usually include:
1. Identify Your Goals
Think about what you want the trust to accomplish. Do you want to delay full distribution until your child reaches a certain age? Do you want to provide funds specifically for college or medical needs? Clear goals help shape the trust terms.
2. Choose a Trustee
The trustee manages the trust property according to your instructions. This can be a trusted family member, friend, or professional, such as a bank or trust company. Choose someone responsible, organized, and financially capable. You may also name a successor trustee in case your first choice cannot serve.
3. Decide on Distribution Terms
You can give the trustee broad discretion to use funds for your child’s benefit, or you can set specific rules. For example, you may allow distributions for education and basic support but delay lump sum payments until later adulthood.
4. Work With an Estate Planning Attorney
Louisiana has unique laws rooted in civil-law traditions. Trusts must be drafted carefully to comply with state law, including forced heirship rules in certain cases. An attorney can ensure the trust language is valid and reflects your wishes.
Planning Today Protects Tomorrow
Setting up a trust for your minor children is about more than passing down assets. It is about making sure their needs are met and their future is guided by someone you trust. Thoughtful estate planning can prevent court complications and provide clear direction during an already emotional time.
To learn how to create a trust that protects your children and reflects your wishes, contact Losavio & DeJean, LLC to discuss your options.