Leaving an inheritance to your children can be a business fraught with many questions. If the children are minors, there is one question of who will take care of them. Then there is the question of what will happen to the property of money that they will inherit, and who will manage the financial end until they come of age. These instructions and any others can be put in your will.
When there are no property management arrangements for minor children the probate court will appoint someone to act as the minor children’s property guardian. Many times this will be the surviving parent. A court-appointed guardian will have restricted power over the administration of the property unless the amount of property is small. In this case, some states let an executor retain a guardian under the Uniform Transfers to Minors Act. To prevent the problems associated with court-appointed custodians and guardians choose someone and place them in the will as guardian.
Here are four of the easiest and most useful ways to designate a guardian.
• Name a Property Guardian in Your Will
- If at your death, a minor child needs a guardian the person you chose will be appointed by the courts. If there is no trust the guardian will handle the inherited property for the minor child.
• Set Up a Trust for Each Child
- You can set up a trust by naming a trustee in your will who will handle the financial and property left to a child until a specified age.
- The trustee must follow the requirements stated in the will and can spend the money for the health, living expenses and education for the young child. When the child reaches the specified age, the balance of the estate is given to the beneficiary in full.
- If the age specified is reached before your death, the inheritance goes directly to the beneficiary.
• Set Up a ‘Family Trust’ for Your Children
- When there are young children, you have the option of setting up a “pot trust” or “family trust”. The trust is authorized in the will and you designate a trustee. The trustee can then spend the trust money on each child according to its needs.
- The trust ends when the youngest child turns a certain age, normally 18. The plan gives flexibility to the trustee, but for the older children, this can be a drawback because they do not control their share until the youngest child is of age.
There are numerous ways to leave an inheritance to your children: however, getting clear advice from an attorney is the best counsel for anyone making a will.