How to Leave Assets to Minor Children
Most parents plan for their children to be taken care of in the event of their demise. However, providing and taking care of a child includes more than just picking a guardian to raise him/her in case of the parent’s death or incapacitation. It also involves outlining what happens to the finances and property as well as who manages them before the children are of age to take over.
Failure to make such plans especially may cause a lot of trouble and leave your children uncared for and possibly broke. All these are reason enough for parents to prepare adequately on how to leave assets to minor children.
Set Up a Living Trust for your Child
Trust is a way of handing over your property for your children. You could choose to pick separate trusts for every child you plan to leave your inheritance to or establish one main trust for your entire family to cater for all the minors within.
Trusts permit for more control of assets when you die. Setting up a trust allows you to give information on how you want your children’s inheritance to be managed, who you want to manage them, situations that may lead to its distribution and the conditions for withholding the inheritance. Furthermore, a trust allows you to decide whether you will appoint your children as sole owners and managers of your wealth or make them co-trustees. Moreover, trusts work efficiently as a tool for moving assets to a fully-grown child while reducing estate taxes and pointing out how your assets would be handled after your demise.
Moreover, a living trust not only allows you name a guardian to manage your child’s inheritance till he/she reaches a specific age and is capable of effectively taking care of the inheritance upon your incapacitation, but it also protects your children from creditors, ex-spouses and family, irresponsible expenditures.
Write a Will
It is common for parents to assume that, when they appoint a guardian in their will to take care of their minor children, the guardian automatically uses the inheritance to provide for the kids. However, this is not the case because, when you die, your will is taken through probate. These probate courts have specific rules that govern contents of a will for instance:
- The children receive full inheritance when they reach majority regardless of any outside intentions
- The court controls the inheritance until the minor reaches 18 or 21 years of age
- With probated wills, the court appoints a guardian to raise the children (usually the one mentioned in the will)
When the child reaches legal age, they assume all power over the inheritance and they are allowed as well to seek help from an adult to manage their wealth.
Getting Legal Help
Seeking advice from a well-versed estate planning attorney will help you ensure your wishes are granted upon your death or incapacitation. The attorney will be of great importance especially when you are not capable of choosing from the many estate planning tools. For more information or consultation with experienced and knowledgeable attorneys on estate planning and probate matters, and much more, contact The Mattar Firm today.