Estate Planning with Minor Children: What Every Parent Needs to Know

By Justin J. Wall, Esq.

Bar Licensed Trusts & Estates Attorney

Utah and Arizona

ESTATE PLANNING ESSENTIALS

Planning for the unexpected isn’t something most young parents want to think about. But if you have minor children, making legal preparations now is one of the most meaningful acts of love and protection you can offer them.

Many families in Cache County, Utah are just getting started—building careers, paying off homes, and raising young children. Estate planning may seem like something only older or wealthier people need to think about. The truth is: if you have kids, you need a plan.

In this guide, we’ll walk you through what happens if you don’t plan, how to set up a common trust (also called a pot trust) for your children, how to structure guardianship and trustee roles, and how tools like life insurance and retirement accounts fit into the picture. Our goal is to give you peace of mind and a clear path forward.

What Happens If You Don’t Plan

If something unexpected happens to you (or both you and your spouse), and you haven’t created an estate plan, the consequences are serious—and the court steps in.

• Guardianship of your children will be decided by a judge. Your family can make recommendations, but there’s no guarantee the court will choose the person you would have wanted.

  
  

• Probate becomes necessary for any assets, including life insurance proceeds or retirement accounts left directly to a minor.

  
  

• A conservator may be appointed to manage money on your child’s behalf, even if that conservator isn’t someone you’d trust.

  
  

• Minor children cannot inherit directly, meaning assets are held until they reach legal age (usually 18), at which point they receive everything outright—with no restrictions, guidance, or protections.

  
  

The emotional toll and financial confusion placed on surviving family members can be overwhelming. Fortunately, it doesn’t have to be this way.

The Common (or Pot) Trust: The Foundation for Financial Management

One of the best tools for families with minor children is the common trust, also known as a pot trust. This is a flexible, child-centered way to manage estate assets after your death.

Instead of dividing your estate into separate shares for each child immediately, a pot trust keeps everything in one pool. The trustee (the person you appoint to manage the money) then uses the trust to provide for all your children collectively until the youngest reaches a specific age—often 21 or 25, or at 18 plus graduation from high school. This is up to you.

This approach is particularly fair for families with children at different ages. Let’s say you have a 17-year-old and a 6-year-old. If the estate were split 50/50, the older child would get a full share and the younger child’s share would be used over the next 12+ years to cover living expenses with a guardian. That’s not equitable. The pot trust allows the trustee to provide for the younger child's needs fairly, ensuring each is supported until adulthood.

When the youngest child reaches the chosen age, the trust splits and any remaining funds are distributed as outlined in the trust. You can also specify different ages for when each child gains control over their individual share—perhaps 25, 30, or even later depending on your comfort level.

Funding the Trust and Managing Distributions

A pot trust is only as useful as the instructions and assets that fund it. Most young families use life insurance as the primary funding source—more on that shortly.

Once the trust is funded, the trustee follows your rules for distributions. Distributions are payments made from the trust to cover your children’s needs—like housing, education, healthcare, or other expenses you allow in the trust. And you, as the creator of the trust, get to set those rules. You have a lot of flexibility here:

• Pure discretion: The trustee decides what’s appropriate, based on each child’s needs. Example: One child may need tutoring or therapy, while another doesn’t. The trustee can approve payments based on what each child actually needs in the moment, without being locked into strict rules.

• Fixed amounts or ranges: You can set a monthly allowance or define a distribution range. Example: The trust might allow the trustee to distribute $1,000 per month per child, or give them discretion to distribute between $750–$1,500 depending on expenses.

• Minimums or caps: These prevent excessive spending or ensure a basic level of support. Example: You might set a minimum of $500 per child per month to ensure their needs are met, but cap non-educational spending at $5,000 per year to avoid frivolous use of trust funds.

• Purpose-based: You can limit distributions to certain areas, like education or medical needs. Example: The trust could allow distributions only for tuition, school supplies, health insurance premiums, or medical treatments—ensuring funds aren’t used for vacations or entertainment unless specifically allowed.

A well-drafted trust might include authorized distributions for:

• Basic living expenses (housing, food, clothing)

• Healthcare, insurance, and therapy

• Educational costs (school tuition, books, college fees)

• Extracurricular activities (sports, music lessons, camps)

• Family vacations or enrichment experiences

• Special needs or medical emergencies

  
  

These guidelines help the trustee make consistent, child-centered decisions while avoiding unintended waste or misuse of funds.

Trustee Selection: Who Will Manage the Money?

The trustee is one of the most important roles in your estate plan. This person—or institution—will be responsible for managing your children’s inheritance and making sure it's used wisely and according to your wishes.

When choosing a trustee, start with integrity. This is non-negotiable. You need someone who will carry out your instructions faithfully and always act in your children's best interests. Financial sense is also important. Your trustee doesn’t need to be a CPA, but they should be responsible, organized, and confident handling money. Consider availability as well—this isn’t a one-time task, and you'll want someone who has the time and stability to serve for several years, if needed.

While it’s not a requirement, it can be helpful if the trustee has a personal relationship with your children. Someone who knows your kids may be better equipped to make thoughtful, individualized decisions for their benefit. That said, many families choose a professional or institutional trustee, especially when large sums of money are involved or when family dynamics are complicated.

Some parents name the same person to serve as both guardian and trustee. This can work well in the right situation, especially if there’s a high level of trust and communication. However, it’s important to understand that it may create a conflict of interest. The person raising your child would also be managing the money, including making decisions about distributions that directly benefit themselves. That’s not necessarily a problem, but it’s something to think through carefully. As an alternative, you might consider naming co-trustees—one to manage the funds and another to provide input or oversight—so that responsibilities are balanced and accountability is built into the structure.

Life Insurance: Making the Trust Work

Most young families in Cache County aren’t sitting on massive estates—and that’s okay. At this stage of life, you're likely still building your wealth, paying down student loans, investing in a home, and focusing on your kids. That’s completely normal. What you may lack in accumulated assets can be created through life insurance.

A simple term life insurance policy can provide hundreds of thousands (or even millions) of dollars for a low monthly cost. The key is this: name the trust as the beneficiary.

Why is that important? Naming the trust avoids probate delays, eliminates the need for a court-appointed conservator, and ensures your chosen trustee can access the funds immediately. It also gives you the power to control how and when those funds are used for your children’s benefit, rather than handing over a lump sum with no guidance or protection.

Think of the trust as a container—and life insurance as the resource that fills it. Together, they provide a complete and flexible solution for your child’s future.

Planning for Retirement Accounts

Don’t forget your retirement assets—IRAs, 401(k)s, and similar accounts. These accounts can’t be inherited directly by minors. If no plan is in place, a court will need to appoint a conservator, adding time, cost, and confusion.

The good news is that a properly structured trust can be named as the beneficiary of your retirement accounts. Under the SECURE Act, trusts may still be drafted to qualify for extended payout periods until the child reaches the majority age. Naming the Trust as the beneficiary of an IRA for a minor child involves complex planning and should not be done without experienced, competent legal counsel. But done correctly, a well-drafted trust allows you to delay inheritance until your child reaches a more mature age, set rules for how and when funds can be used, and coordinate tax-efficient strategies for large retirement accounts.

It’s a key part of a comprehensive estate plan for parents.

Guardianship: Choosing the Right People to Raise Your Kids

Now that we’ve addressed the financial side, let’s talk about the emotional heart of the plan—guardianship.

This is the person or couple you choose to raise your children if you’re not here. They’ll make the day-to-day decisions about schooling, healthcare, religion, and routines—but their influence goes far beyond logistics. A guardian will help shape the kind of person your child becomes. They’ll model values, navigate challenges, celebrate milestones, and offer the love and stability your child needs to grow into a healthy, confident adult.

The guardian you choose will influence what your child learns about kindness, responsibility, and perseverance. They’ll decide whether your child plays soccer, learns to play the piano, or goes camping every summer. They’ll be the one to support your child through heartbreaks, homework, and hard questions about the world. In short, the guardian will become a central figure in your child’s life story—so this choice deserves careful, personal reflection.

When choosing a guardian, there are several important considerations. Start by thinking about the emotional bond—does your child already know and feel comfortable with this person? That foundation of trust can make a tremendous difference in helping your child adjust to a new reality. Parenting style matters too. Ask yourself whether their values, beliefs, and approach to discipline and education align with your own. Lifestyle is another factor. Would your child feel “at home” in this person’s world? Consider the environment they’d be raised in, including the presence of other children, pets, religious or cultural practices, and general day-to-day routines.

Age and health are also critical. Raising a child requires physical and emotional stamina, so your guardian should be capable of parenting actively for at least the next 10 to 15 years. Geography plays a role as well—if the guardian lives far away, your child may have to move schools, leave friends, and adjust to an entirely new community. These transitions can be manageable, but they should be considered in advance.

It’s wise to name a backup guardian, too. Life changes, and the person who seems perfect today may not be in a position to serve years from now. Including a contingency ensures your children will still be cared for by someone you trust, even if your first choice becomes unavailable. And remember, the guardian and trustee don’t have to be the same person. In fact, keeping those roles separate can help maintain checks and balances—one person focuses on care and parenting, while the other handles finances—allowing each to stay in their lane and act in the child’s best interest.

UTMA and UGMA Accounts: Simple but Limited Alternatives

If setting up a trust isn’t feasible, you might consider using a UTMA (Uniform Transfers to Minors Act) or UGMA (Uniform Gifts to Minors Act) account. These are simple custodial accounts that allow an adult to manage money on behalf of a child until the child reaches the age of majority—usually 18 or 21 in Utah. They’re easy to set up, relatively inexpensive, and are commonly used for smaller gifts or savings. For example, a grandparent might use a UTMA account to give a child birthday money or contribute to a college savings goal.

But while these accounts have their place, they come with major limitations. Once the child reaches the designated age, they gain full control of the account—with no restrictions on how the funds are used. You can’t delay access or tie distributions to maturity, responsibility, or educational milestones. This lack of control makes UTMA and UGMA accounts a poor fit for larger inheritances or life insurance proceeds intended to last into adulthood.

In contrast, a trust gives you far greater flexibility. It allows you to stagger distributions over time, limit the purposes for which funds can be used, and appoint a trustee to oversee the money with care. In most cases, if the goal is to protect and provide for your child well into their future, a trust is the better option.

Wrapping Up: Your Kids Deserve a Plan

Estate planning isn’t about predicting the future—it’s about preparing for it. You can’t control what happens, but you can make sure your children are protected, loved, and provided for if the worst occurs.

The good news? This doesn’t have to be complicated. With a simple trust, the right guardian and trustee, and adequate life insurance, you can create a rock-solid plan tailored to your family’s needs.

If you live in Cache County, Utah and you’re ready to take this step, you don’t have to do it alone.

Ready to Start?

At our firm, we specialize in helping young families build practical, effective estate plans that grow with them. Whether you live in Logan, Providence, North Logan, Hyrum, or anywhere else in Cache County, we’re here to help you secure peace of mind for your family.

Schedule a consultation today. Let’s build a plan that puts your kids first—no matter what the future holds.