The pooled trust: an equitable solution, rather than an equal one

I have a lot of clients who have young children, and often, they are spaced a few years apart. When this is the case, a great solution might be a pooled trust.

A pooled trust keeps everything in your estate in one big trust, with money available for all of your children from the common pot. It’s held that way until the youngest child reaches a certain age, usually around 22 to allow them to finish a college or university degree. The advantage is that the younger children are not penalized for having greater costs to be paid out of trust – often, you would have been helping your children with tuition costs, etc., so older ones may have had that benefit before your death while younger children have to pay for education expenses out of their own trusts before having money for other purposes. Pooling a trust means that younger children get that same advantage; the trust is then split apart when the youngest child reaches a specified age, and each child has their own trust for their own expenses from that point.

If you have more than two children, or your children have a larger gap between them, a pooled trust might be the right solution for you.