How Your Kid Can Be Like Dannielynn

Dannielynn Hope Marshall Birkhead is taking her first steps, toward the Forbes rich list.

On March 4 a Los Angeles judge declared Anna Nicole Smith and Larry Birkhead’s 18-month-old daughter, Dannielynn, the sole beneficiary of her late mother’s estate. This news could make Dannielynn a multi-millionaire depending on the outcome of a now decade-long battle Smith's legal team is waging against the family of her first husband, billionaire oil tycoon J. Howard Marshall II. The money Dannielynn inherits will be put into a trust with her father and Howard K. Stern, Smith’s long-time lawyer, managing it as co-trustees.

For now, little Dannielynn has $710,000 from her mother, who stared in the Anna Nicole Show (CMCSA) and modeled for Guess?(GES) and Playboy (PLA). Enough to keep her in diapers for a few years.

The cushion of having money set aside for your newborn child or loved one is a gift he or she will be very grateful for down the road, especially when it comes to purchasing a home or an automobile. There are a few ways you can start putting away money for your baby.

“Taking the time and money to sit down with an estate attorney to set up a minor's trusts is the best way to have control over when and how much of the money your child will get,” says Brian Jones a financial planner and vice president at CJM Wealth Advisors in Fairfax, Va.

Trusts take about three months of paperwork and roughly $1,000 to $2,000 in estate attorney fees if you’re living in Columbus, Ga. says Alan Rothschild, Jr., the trust and estate division vice chair of the American Bar Association. Jones says the planning costs closer to $6,000 in the Fairfax, Va. area. That price may be worth it to the donor and trustee of the trust fund who will ultimately have control over the money distributed to the beneficiary, even if when they are an adult. “Some people mature later than others," says Rothschild. "If a parent puts $12,000 a year into a trust account for several years, the parent or donor can decide when and how much the beneficiary gets."