Inheritance for Children

by M-Gillies
Child watching another child with his parent

Leaving an inheritance to your child is easier said than done. If you die and leave your child alone make plans so your child is taken care of in the future.

There are some big questions you have to ask yourself when anticipating the worst. In the event of premature death, it’s important to plan ahead as best you can ensuring that all loose ends are tied. This can be in pre-planning a funeral or ensuring your finances are in order. However, if you have children, there is more than just picking someone to raise them in the event of the unforeseeable.
You should ask yourself, what will happen to the money or property you have left for your children to inherit? Who will manage it for them until they are adults? How will they access this inheritance and when will this inheritance be given?

With a Living Trust, instructions can be left for a guardian of property to manage the inheritance for the children until they reach an age where they can responsibly access it. The simplest way to structure this arrangement is by:

1. Naming a Property Guardian in your Will: A property guardian can be named in your will for your child and if at your death the child requires a guardian, the court will appoint the person named in your will. It will be their responsibility as property guardian to manage whatever property the child inherits from you or others until they are 18.

2. Name a Custodian under the Uniform Transfers to Minors Act (UTMA): The UTMA appointed custodian will oversee the management of property left for children until they reach the age of 21, while in some states, that age can be 18.

3. Setting Up a Trust for Each Child: With this arrangement, your will or living trust will name a trustee (a trusted relative or friend) who will handle the money or property which will be inherited by the child at an age you specify. Unless the child is above the specified age at the time of your death, the trust will be governed by a trustee named in the will or living trust.

4. Setting Up a Pot Trust for your Children: A pot trust or family trust is a trust created which allows for a trustee to dispense money to each of the children. The same amount does not have to be given to each child; instead the trustee decides what each child needs, allowing for greater flexibility to the trustee. Once the youngest child turns 18, the trust ends, however, until that period, the older children may not gain control over their inheritance until they are well into adulthood.

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