There are many families blending children from multiple marriages. The children from these families often range widely in ages.
Parents I meet with often want to provide for only the younger children until they reach a certain age. Their belief is typically that the younger children have greater needs and should have the benefit of great financial assistance. When developing this plan we have to weigh the need to provide for the younger children against the desire to ultimately share the family assets equally among all of the children.
What is a Sprinkle Trust?
One suggestion is the Sprinkle Trust. This trust would be established under the will of the second decedent spouse. The trust, through a named trustee, would benefit only the named “younger” children until the youngest reaches an appointed age often in the early twenty’s. The trustee can pay for expenses for the named children’s health, support, maintenance and education. After the youngest child attains the appointed age, the Sprinkle Trust will then split into equal shares for each of the older and younger children. The assets after the split can either be paid outright to a child or can be maintained as a separate trust for each beneficiary.
The Sprinkle Trust is only one planning opportunity and is not one that solves the planning issues for all families. Second marriage planning can be very complex and should be reviewed with experienced planners and advisors.
