Leaving inheritance to a minor beneficiary can pose legal challenges, unlike inheritances bequeathed or left to an adult beneficiary. The reason being is that individuals who are minors are not allowed to take control of money or assets that they inherit until they come of full legal age, which is the age of at least 18. Furthermore, if you are leaving inheritance to a minor, you want to ensure that the person that you select to manage the money that you leave to the minor is well versed in investment philosophy, for instance, so that your child(ren) will have the financial resources necessary to obtain an education or to establish themselves into adulthood. Therefore, when estate planning includes the care for minor children, it is essential to consult the experience of a qualified probate lawyer to establish a financially secure future for your child(ren).
Establish a Trust
In some situations, it may be beneficial for a parent, or both parents, to create a trust for their children in order to protect the assets bequeathed to the minor child(ren). And, there are numerous types of trusts that exist to ensure that the assets left to a minor are protected, depending on the specific requirements of each individual family member. Trusts can be created to provide for the education expenses of the child(ren), to protect against abuse and overspending, to create a lifelong source of income, to assist in purchasing a home later in life, to provide for the health, education, maintenance and/or support of the child, or to cover any recurring medical expenses for a child who may need long-term care. Additionally, in order to protect the assets of a trust, trusts should include a well-structured SpendthriftClause and should be governed by a trustee who can act as a financial guardian for the child(ren), thus preventing the minor or young adult from making fiscally detrimental decisions or preventing others from interfering with the proper financial decisions of the child(ren). Whenever you create a trust it is best to choose a trusteewho you would trust with your life as that person will make sure that your child(ren) are cared for, as well.
Milestones of Inheritance
Depending on the age of the child, the person creating a trust may want to stage the timing of inheritance to coincide with numerous milestonesin the child’s life. For example, the minor child may receive a specific cash allotments around the time that he or she goes to college, needs to purchase a first car, graduates from high school or college, or when starting a new career; and under the guidelines of the Uniform Transfers to Minors Act (UMTA) and the Uniform Gifts to Minors Act (UMGA), a person leaving assets to a child, such as a parent, may leave assets directly for their children’s benefit, to be used for specific events related to health, education, and well-being of the child.
Because trusts can be complicated to prepare and to understand how the many different options can work together in order to meet your estate planning needs, you should consult with an experienced probate attorney or trust attorney to discuss all of your options.
The attorneys at Goldstein & Scopellite, PC, are qualified trust lawyers. Their offices are located in Dallas, Texas and in Tucson, Arizona.
Goldstein & Scopellite, PC was established in the year 2002 and more information on the firm can be found on the local listing in D Magazine.
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