Child / age-stage trust
Trust for a child (or grandchild) with distributions at specified ages or milestones — e.g., one-third at 25, 30, 35. Often includes HEMS discretion and spendthrift clause before staged payouts.
| Facet | Detail |
|---|---|
| Also called | Age-stage trust, staged distribution trust, trust for descendant |
| A-B / A-B-C role | None — funded from residue or share of estate |
| When created | At grantor's death |
| Revocable | No once funded |
| Inter vivos / testamentary | Testamentary |
| Typical beneficiaries | Named child or grandchild |
| Primary purpose | Delay full control; protect from immaturity, creditors, divorce |
| Marital deduction | No |
| Uses estate exclusion | Part of taxable estate unless funded from bypass remainder |
| In survivor's estate | No — beneficiary is child/heir, not spouse |
| Basis step-up | At grantor's death |
| Income tax | Form 1041; K-1 to beneficiary when distributed |
| Crummey powers | No |
| GST / dynasty | May allocate GST exemption for grandchild beneficiaries |
| Spendthrift | Yes — standard feature |
| See-through (IRA) | Conduit or accumulation if drafted for IRA |
| Key tradeoff | Protection vs trustee cost and beneficiary frustration with delays |