If you're financially responsible, your children have a much better chance to grow up financially responsible.
If you wait until your children are high school seniors to spring it on them that there's not a whole lot of money for school, they won't have too many options.
Money you won't need to use for at least seven years is money for investing. The goal here is to have your account grow over time to help you finance a distant goal, such as building a retirement fund. Since your goal is in the future, money for investing belongs in stocks.
I want to be clear here: It does not matter what you say in your will or trust; the beneficiary document attached to your IRA accounts and your life insurance policy overrides what you say elsewhere. If you want to change the beneficiary, you must change the beneficiary document.