You need a revocable living trust if you have children under the age of 25 years.

Attorney Tom Olsen: Here's a text from a lady. She says that she's married and she and her husband have two young children. She wants to know, do they need a trust? The answer is, yes. People are using trust generally for the purpose of avoiding probate, and people want to avoid probate these days because it's expensive. That's the reason why most people use a trust. For this couple that has young children, they'll be using a trust. When I say trust, we're all talking about the same thing. A revocable living trust, they're all the same thing, just generally called a trust.

For her, she'd be using it for the purpose that if mom and dad both passed away, they can't turn their wealth over to young kids, or minor kids. Their wealth would put into this trust, would be used for the children's benefit to help them go to college, help them buy a car, help them buy a house. Typically, the children don't get that money until they reach age 25 or 30 or 35, whatever the client wants. That's a second reason for people with young kids to do a revocable living trust.

Attorney Chris Merrill: Yes, it's important. Once again, people don't realize that the tool that is required when you do have young children is that you have to use a trust.

Attorney Tom Olsen: I had a client last and she did something that is not all that unusual. She's a single mom. With a young child, she named her mom as a beneficiary of her IRAs and life insurance. She said, "Yes, if I pass away, all my wealth goes to my mom and I know that she will take care of my child." I say the instant flaw of that problem is, "Okay, you pass away. Now, your mom inherits everything. What happens if she passes away? Where's your wealth going to go then?"

Attorney Chris Merrill: Exactly.

Attorney Tom Olsen: I don't know. You don't know? We don't know.

Attorney Chris Merrill: Correct.

Attorney Tom Olsen: Not a good plan.

Attorney Chris Merrill: Correct.

Attorney Tom Olsen: It's not unusual. I've had other clients come in and say, "Tom, if we pass away, our kids are going to live with my brother. I name my brothers a beneficiary of all my IRAs and life insurance. He'd use that money to take care of my kids." Not a good plan.

Attorney Chris Merrill: Correct.

Attorney Tom Olsen: A living trust is a better plan. Folks, if you want someone's help with your estate planning, we'd be pleased to assist you with the Olsen Law Group. My name is Tom Olsen. The name of the show is Olsen on Law.

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