Most parents who call about an estate plan are worried about one question: who would raise my children. It is the right question, and it has a clear answer. A will is the only document where you can formally name a guardian, and if you have children under eighteen, that alone is reason enough to have one.
But naming a guardian is only half the job, and it is the half most people stop at. The other half is the money, and it is where plans built from a form quietly fail.
What happens to money left to a child
If you leave assets to a minor outright, Michigan does not hand them to your child. It cannot. A minor has no legal capacity to receive or manage property. Instead the probate court appoints a conservator to hold and manage those assets, files and accountings follow, and the arrangement stays under court supervision until your child turns eighteen.
Then, on their eighteenth birthday, whatever is left is handed over. All of it. At once. With no conditions and no oversight.
Stop and picture the actual number. For a young family the estate is rarely just a bank account. It is the equity in the house, plus a 401(k), plus a life insurance policy that was sized to replace an income for twenty years. Two or three hundred thousand dollars is an ordinary result, and it is not unusual for it to be considerably more.
That is the sum arriving in the hands of an eighteen-year-old, in one transfer, six weeks after high school.
The gift that does more harm than good
This is the part worth being blunt about. Most eighteen-year-olds are not equipped to receive a sum like that, and the harm is not hypothetical. Money that size at that age tends to end a young person’s momentum rather than fund it. It arrives precisely when they are deciding whether to finish school, and it removes the reason to.
Nobody plans for that outcome. It is simply what the default produces when a parent names a guardian, leaves the money outright, and assumes the two decisions are connected. They are not.
What a trust does instead
A revocable living trust lets you decide the terms, which is the whole point of a trust and has nothing to do with being wealthy. Instead of a date on a calendar, you choose:
- When money is released. In stages rather than all at once. The schedule we use most often releases a share at thirty, another at thirty five, and the remainder at forty, with the trustee able to use funds for your child’s benefit throughout.
- What it can be used for in the meantime. Education, health, housing, a first business. Your trustee can pay for those directly while your child is still young.
- Who decides. You name a trustee and give them as much or as little discretion as you want. That can be the same person raising your children, and often it should not be.
That last point deserves its own line. The person best suited to raise your children is not automatically the person best suited to manage a few hundred thousand dollars for fifteen years. Those are different skills. Splitting the roles is common, sensible, and costs nothing to set up. It also builds in a quiet check, because the person spending the money is not the only person watching it.
You are not locking in a judgment about a four-year-old
This is the objection worth answering directly, because most parents feel it before they say it. Staging distributions into your child’s thirties can sound like a vote of no confidence in a person who is currently in grade school.
It is the opposite. You are writing terms at a point when you genuinely cannot know who your child will become, so you set a schedule that protects against the version of the future you cannot rule out. It is insurance against an unknown, not a verdict.
And it is not permanent. A revocable trust can be amended for as long as you are alive and able. Parents do this regularly. You watch a child finish school, hold a job, handle their own money sensibly, marry someone steady, and at some point the reason for the staging is simply gone. Then you amend it. You can move the ages earlier, collapse the stages into a single distribution, or remove the schedule for one child and keep it for another who is on a different path.
The staged schedule is the default you leave in place while the question is still open. When your children answer it, you change the document.
Life insurance is usually the largest piece
For young families, life insurance is typically the biggest number in the plan, and it is the one most often left pointing in the wrong direction.
Insurance passes by beneficiary designation. It does not pass under your will or your trust, and neither document can redirect it. The form controls. If the beneficiary form names your minor child directly, you have created exactly the problem described above, and you have done it with the largest asset you own.
If it names a guardian personally, in the hope they will use it for your children, you have done something riskier still. That money becomes legally theirs. It is exposed to their creditors, their divorce, and their own estate plan.
The usual fix is straightforward: the trust is named as beneficiary, and the trust says who gets what and when. It takes one form and it is the highest-value half hour in the whole process.
What a plan for a young family usually contains
- A revocable living trust, holding the house and receiving the life insurance, with terms you set.
- A will naming a guardian, which is the only place that nomination can be made, and pouring anything outside the trust into it.
- Updated beneficiary designations on life insurance and retirement accounts, so they point at the trust rather than at a child.
- A durable power of attorney and a patient advocate designation, which matter while you are alive and are the documents families reach for most often.
- A deed prepared to move your home into the trust, which is what makes the trust function at all.
The most common failure is not a missing document
It is a trust that was drafted and never funded. The deed was never prepared, or the insurance beneficiary was never changed, so the trust sits in a drawer controlling nothing while the assets go through the court anyway.
If you already have a plan, that is the thing to check, and it is a short piece of work regardless of who drafted it. Find the deed and pull the beneficiary form. Those two pages tell you whether your plan actually works.
Remy Law PLLC is based in Ann Arbor and works with families across Washtenaw County and western Wayne County. George Remy has practiced law in Michigan for more than eighteen years, handles every plan personally, and quotes a flat fee before any work begins. The first conversation is a free fifteen minute call.