A more thorough explanation:

Child’s trust is a type of trust fund that is created for children by their family members. The purpose of this trust fund is to manage the assets until the children become mature enough to handle them on their own.

Child’s trusts can be created in different ways. The trustee can be given specific instructions to give the beneficiaries a certain amount of income yearly or even spend the money on their behalf. For example, a child’s trust can be created to pay for the child’s education or medical expenses.

Child’s trusts can also be established to last until the children reach a certain age or even well into adulthood to prevent spendthrift activity. This means that the children will not be able to spend all the money at once and will have to manage it responsibly.

One of the benefits of child’s trusts is that they may reduce the taxes the assets will generate and help the kids avoid the troublesome process of probate for wills.

For example, John creates a child’s trust for his daughter, Sarah. The trust is set up to pay for Sarah’s college tuition and living expenses. The trustee is given specific instructions to pay for these expenses directly from the trust fund. The trust will last until Sarah graduates from college.

In this example, John has created a child’s trust to ensure that his daughter’s education is paid for without any financial burden on her. The trustee is given specific instructions to manage the trust fund and pay for Sarah’s college expenses directly from the fund.