Implementing Divorce Changes - Minor Children and Trusts

After a divorce, your financial situation changes.  Creating a trust can protect the money you pass on to the children and allow you to guide how it is paid out.  If you pass while the children are minors, your ex-spouse typically will get full legal and financial guardianship of the minor children, even if you have remarried (unless the stepparent adopts the children). By default your ex-spouse will have control of the children’s money while they are minors. 

There are two types of guardianships for a minor child: legal guardian and financial guardian.  The legal guardian is the physical guardian of your child.  A trust can name a financial guardian for your minor children, but it cannot name a legal guardian.  When you create a trust, you will have the right to name a trustee (typically yourself) and a successor trustee that has to follow the instructions within the trust document.  These instructions dictate how the trust property is managed – how to invest, spend and distribute the money that is set aside.