Child's Trusts and Descendant's Trusts with second generation planning (a/k/a "second generation trusts") are very flexible. The typical trust has the following terms:

• Each beneficiary (each child or other descendant) is the named primary beneficiary of his/her own separate lifetime trust.
• The beneficiary's children and/or other descendants are usually secondary beneficiaries of the beneficiary's trust while the beneficiary is living.
• Distributions of income and principal can be made to any of the trust beneficiaries to provide for their health, education, support, and maintenance. In some cases, customized distribution provisions are permissible.
• A relative, a bank or a private trust company, or any other qualified person or entity is usually appointed as the initial trustee of the beneficiary's trust; however, the beneficiary is usually given the right to become a co-trustee at one age (usually age 25 or 30) and the right to become the sole trustee at a subsequent age (usually 5 years subsequent to the co-trustee age).
• The beneficiary usually has a testamentary "power of appointment" (described below) over his/her trust.
• There will be more income tax options with respect to trust income because there is more than one potential income taxpayer.