What Type of Trust Should Young Families Have?

When you're raising young children, it’s easy to get caught up in the day-to-day. But what would happen to your kids if something unexpected happened to you or your spouse? Creating a solid estate plan isn’t just something for the ultra-wealthy—it’s a responsible and loving move for everyday families. At McCammon Law, we often talk with Kerrville families about the importance of estate planning for young families, and trusts are often a key part of that conversation.

Let’s take a closer look at how trusts can help protect your children, your assets, and your peace of mind.

Why Trusts Are Important for Families with Young Children

Estate planning for young families is about much more than just who gets what. It’s about making sure your children are cared for by people you trust and that your assets are used wisely for their benefit.

Without a clear plan, including properly structured trusts, your assets may be tied up in probate court, and decisions about your children’s care could be left to a judge. Trusts help you stay in control—even when you’re no longer here to make decisions yourself.

Types of Trusts to Consider for Your Young Family

Each family’s needs are unique. At McCammon Law, we help Kerrville parents choose the right type of trust based on their financial situation and their goals for their children’s future.

Revocable Living Trust

A Revocable Living Trust is a flexible option that allows you to manage your assets during your lifetime and make plans for what happens if you pass away or become incapacitated.

• Why it works for young families: You can name a trustee to manage your assets on behalf of your children. If something happens to you, the trustee steps in and follows your instructions—no court process required.
• Bonus: This kind of trust avoids probate, so your family can access the funds quickly without waiting on court approval.

Trust for Minors

A Trust for Minors allows you to decide when your child will receive an inheritance and how it can be used.

• Set conditions: You choose the age (or ages) when your child gets access to the money—maybe 25 or 30 instead of 18.
• Provide guidance: You can specify that the money be used for health, education, or other approved purposes.

This kind of trust gives you peace of mind that the funds won’t be spent unwisely or mismanaged.

Testamentary Trust

A Testamentary Trust is created in your will and only comes into effect after your passing.

• Court involvement: Unlike a revocable trust, a testamentary trust must go through probate before it takes effect.
• Still useful: It’s often used to manage money for minor children and can offer long-term protections.

This is a more basic trust structure but still offers important benefits for families with young kids.

Special Trust Options for Education and Retirement Assets

Education Trust

An Education Trust ensures that funds are set aside specifically for your child’s schooling—from kindergarten through college or beyond.

• Clarity and control: You decide how much goes toward education and what happens to any unused funds.
• Supplemental option: This can be used alongside a 529 College Savings Plan for extra security.

Read more in our article, Smart Strategies for Funding Your Grandchild’s Higher Education, about how to contribute wisely to your children's higher education.

IRA Trust

If you have a retirement account, like an IRA, you can use an IRA Trust to make sure the funds are managed responsibly for a young beneficiary.

• Avoid guardianship issues: Without a trust, the court may appoint a guardian to manage the account until your child turns 18.
• Protect the future: The trust lets you decide when and how the funds are distributed—ensuring the money supports your child over time.

Give Your Family the Protection They Deserve

Creating a trust as part of your estate plan is one of the best ways to protect your children’s financial future and ensure they’re cared for if something happens to you. Whether you live in Kerrville, Boerne, or the surrounding Hill Country, McCammon Law can help you create a plan that reflects your values and priorities.

Let’s Talk About What’s Right for Your Family

Estate planning may feel overwhelming, especially when you’re focused on raising your children. But taking the time to set up a trust now can save your family time, money, and heartache later.

Request a consultation with McCammon Law for help with every step of estate planning for young families—in plain language, with your family’s best interests in mind.

Reference: Business Insider (Jan. 31, 2025) “I asked an estate planning attorney the best way to establish a trust for my 2-year-old daughter”