Probate Lesson: Should an 18-Year-Old Get a Large Inheritance?

Have a trust in place for your children.  It is very difficult when, in our office, we see a Personal Representative or Trustee have to hand over any amount of money in an estate or trust to a young adult.  The default provision in our children’s trust keeps the money in trust until the children turn thirty.  While that can be changed depending on the client’s wishes, we find that up until the age of thirty, young adults can benefit from the guidance of a trusted older person.  The only way to ensure that the money left to a child over the age of eighteen is used wisely is to have a testamentary trust for children in place with an appropriate trustee.

Another important thing to remember is to make sure that your children are not listed as beneficiaries of assets that are beneficiary designated (such as life insurance).  These assets should be directed to the children’s trust in your Will, otherwise they will go directly to your children and defeat the purpose of the trust.  While normally we do not recommend that retirement funds be left to a trust, our children’s trust is set up to hold a retirement account for the child.

If your child’s share of the retirement fund is left to the children’s trust, the trustee can make sure that they continue to hold the retirement fund as an inherited IRA and thus benefit from the continuing stretch value of the IRA.  If you don’t have a trust for your children, or if you do have a trust but have questions about beneficiary designations, please contact us.  We will help you make sure that your kids will be well set up for a healthy financial future.

Image Credit: Joris Louwes

By | 2016-12-13T09:13:35+00:00 December 19th, 2014|Top Legal Tips|0 Comments

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