Legacy Lagoon: What Is a Trust? (For Kids and Teens)

Legacy Lagoon is the Wealthonauts planet about planning ahead. Professor Ledger answers a question many families wonder about: what is a trust? For kids, the idea is simple. A trust is a set of written instructions for who manages money or property, and for whose benefit.

What is a trust for kids?

In a trust, a person called the grantor (also called the settlor) puts money or property into the trust. A trustee manages it and must follow the trust’s instructions. The people the trust helps are the beneficiaries. The trustee has a legal duty to act in the beneficiaries’ best interest.

Wills, trusts and probate

A will is a document that says who receives property after someone dies. Usually, a will goes through a court process called probate. A living trust, on the other hand, can start working right away. As a result, property that is properly placed in a living trust may avoid probate.

Why families use trusts

Families use trusts for many reasons. For example, a trust can hold money for children until they are old enough to manage it, keep family matters private or support a family member with special needs. Trust law is set mostly by states, so rules differ. Adults should work with a qualified estate-planning attorney.

Start exploring

Begin with the lesson What Is a Trust?, then connect the ideas to ownership on Property Planet.