Posted by Dana Law Group on January 24, 2022
A well-planned estate can help you make sure that your children are taken care of even after you’re gone. Leaving an inheritance to adult children is fairly straightforward. However, things get a little more challenging when you have to leave money or other assets to minor children.
We’re going to cover the basics of how you can leave resources that will provide for minor children even after you’re gone. This is what you need to know about leaving an inheritance to a minor.
The advantage of having a will is that it allows you to outline your wishes when it comes to how your money and assets are distributed after you pass on. However, it’s important to talk about what happens without a will.
What happens to your assets without a will depends on the state you live in. Certain States prioritize distributing inheritance to children first. This means that your children will inherit all of your assets even if you don’t outline this specifically in your will.
Other states prioritize living spouses. If you have a surviving spouse, these states distribute all of your assets to that spouse.
This is an all-or-nothing game without a will. A will allows you to delineate specific amounts, as well as specific assets, to give in individuals.
The first thing you should do is list all of your children as beneficiaries in your will. This will make sure that they are in line to receive money and assets from your estate. Without listing your beneficiaries, you’re leaving all of these decisions up to probate.
You can also list minor children as a contingent beneficiary. A contingent beneficiary receives their inheritance if a specific individual is unable to do so. For example, you can list minor children as contingent beneficiaries in the event that your spouse is unable to receive your inheritance.
A trust fund is an account that holds the money and assets from your inheritance until a minor child reaches a certain age. Once they reach that age, they receive the full pay out of your inheritance.
The trust fund can be a good option so long as you have a trustee that you can count on. A trustee is an adult who will oversee and manage the funds in this account until the child reaches the age specified in the trust.
Trusts can also be laid out for beneficiaries who are legally adults. For example, you can set up a trust that will withhold a full payout until a young beneficiary reaches the age of 21, graduates from college, or meets another requirement that you sent.
You can also choose a custodian. This is the financial counterpoint of the guardian who manages the inheritance and other funds until the child comes of age.
Dana Law Group is here to help you with your estate planning needs. A professional estate planner will make sure that your money and other assets reach the beneficiaries you want them to.