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Do you have to create a new trust for each child in Virginia?

On Behalf of | May 22, 2024 | Wills And Trusts |

Estate planning can feel confusing and overwhelming when you have multiple children. One common concern is whether you need a separate trust for each child.

The good news is that you don’t have to create separate trusts for each of your kids. You can typically create and update a single trust to benefit all your children.

The power of one

The truth is that creating and managing multiple trusts can be confusing even for the most diligent parents. A single trust streamlines the process, saving you money upfront and in the long run.

Meticulously crafting a trust for all your kids can allow you to dictate how you want wealth to be shared among your offspring. To avoid conflict among your children, you can:

  • Establish age thresholds
  • Set conditions for receiving inheritances
  • Stagger distributions over time

This level of control can help ensure your children receive inheritances responsibly throughout their lives.

Managing a single trust is also easier than juggling multiple ones because there’s less paperwork and fewer accounts to track. This translates to less stress for you and can help ensure your children don’t compare trusts among themselves. Furthermore, while Virginia doesn’t have an inheritance tax, a single trust can potentially minimize federal estate taxes.

Trust considerations for multiple children

While a single trust offers numerous benefits, it’s crucial to consider your unique circumstances. For instance, if one child has special needs, a separate trust might be necessary to qualify them for certain government benefits.

Your trusts should also have contingency plans because life can be unpredictable. Consider what happens if a child predeceases you, leaving behind their own children. Your trust should outline how their inheritance would be handled for their beneficiaries.

Creating a single trust for your children can be a prudent and cost-effective strategy. One trust can simplify management, offer flexibility in distribution and potentially reduce tax burdens. However, it’s vital to consider factors like special needs and contingency plans. Consulting with an experienced legal team in Virginia can help you tailor a single trust that fulfills your wishes and provides peace of mind for your family’s future.