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Ask the Expert: Leaving money to children through a revocable trust

You've written that someone can leave money to her adult children in a testamentary trust created in her will. Can I do this with a revocable trust? I don't want my revocable trust assets to be distributed at my death. Instead, I'd like my kids to receive lifetime trust distributions when I'm gone.

Your revocable trust is an alternative to a will; and like a will, it can be used to create an irrevocable trust for your heirs' benefit at your death.

Many parents want to leave their children money in a lifetime trust rather than as an outright bequest, says Eric Kramer, a Uniondale estate lawyer. A well-written trust can protect your heir's assets from creditors' claims. Often, Kramer says, parents' primary goal is to protect their child's inheritance from his or her spouse in the event of divorce.

At your death, your revocable trust can create new, irrevocable trusts for each of your children, dividing your assets between them. Your child can even become his own trustee, provided he appoints a co-trustee — and he can replace his co-trustee at will. "The trust is protected from your child's creditors because he can't invade the principal for himself," Kramer explains. "Only his co-trustee can invade the principal."

You pay more to create a revocable trust than a will, but it's a better vehicle for this estate planning strategy, he adds. The reason: When a trust is created under your will, each future change of trustees must be approved by a court, and going to court is time-consuming and expensive. By contrast, your child won't need court permission to change co-trustees if his trust was created by your revocable trust.

The bottom line

A revocable trust can create lifetime trusts for your children at your death.

More information

TO ASK THE EXPERT Send questions to Ask the Expert/Act 2, Newsday, 6 Corporate Center Dr., Melville, NY 11747, or email Include your name, address and phone numbers. Questions can be answered only in this column. Advice is offered as general guidance. Check with your own consultants for your specific needs.

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