12% a year average return for the next 15 years. What planet are you from aw? I know you are 100% equities right up until withdrawal, but that return is past aggressive. The 100% idea is another ludicrous one. Moving money over to more conservative investments as the goal deadline approaches is not timing the market, it is a sound financial principal. Yes you could lose out on some additional gains, but you will also miss any losses.
Again, the main thing wrong with a VUL for this person is that there is probably not enough disposable income to overfund it and maximize the advatages of the vehicle. I would think an annuity would be out also. This is because if she is maxing out 15% in 401k (6000 pretax) and contributing to ROth IRA (3000 after tax), then she would be living on take home of around $30k/yr. If you are not maxing out the free retirement plans available, then there is no need for an additional annuity, simply up your contribution to the retirement plans.
The trust idea has merit becuase this is a divorce. If you have never gone through one, you don't know how nasty things can get. Sometimes the welfare of the child is overlooked in the quest to "put it to" the other spouse. Yes there would be some fees involved, but the money could stay in both names and be directed for the child's education. You could set it up where both parents' signatures are required to remove money. This would remove any worries about a future step parent raiding the account.
If a single mother making $40k/yr is not in "need" of aid then who is? This is who aid was designed for. While I don't include aid in my considerations, she should as some sort of aid is virtually guaranteed.