How to Leave Assets to Minor Children

Advantages of a Revocable Living Trust Over a Simple Will

Most parents want to make sure their children are provided for in the event something happens to them while the children are still minors. Grandparents, aunts, uncles, and good friends sometimes want to leave gifts to beloved young children too. Unfortunately, these good intentions may have unintended results.  A careful estate plan is essential to protect your children. Here’s how to avoid some very common estate planning mistakes when considering your children’s future.

Don’t Use a Simple Will to Leave Assets to Minor Children - Planning for Expenses and Distribution with a Trust

Many parents think if they name a guardian for their minor children in their wills, their appointed guardian will automatically be able to use the inheritance to take care of the children. But that's not what happens. Probate courts must adhere to certain rules regarding a will:

  • When the will is probated, the court must appoint a guardian to raise the child; usually this is the person named by the parents in their wills. However,
  • The court, not the guardian, will control the inheritance until the child reaches legal age (18 or 21). And then,
  • The child will receive their entire inheritance upon reaching majority, regardless of your intentions.

Parents often, and wisely, prefer that their children inherit a bit later in life. But with a simple will you have no choice - once your child reaches the age of majority, the court must distribute the entire inheritance in one lump sum. 

Avoiding Court Guardianship with a Trust

A court guardianship for a minor child is very similar to one for an incompetent adult. Things move

slowly and can become very expensive.  Each and every cost incurred on your child’s behalf must be documented, audited, and approved by the court – including the attorney who will need to represent your child.  All of these expenses will be paid from their inheritance.  Additionally, because the court must try to treat everyone equally under the law, it is difficult to make exceptions for each child's unique needs.      

A Trust Protects Your Children, Your Assets, and Your Privacy

A Trust offers many practical advantages over a simple will:

  • A Trust allows you to name someone to manage the inheritance, not the court.
  • You decide when your children will inherit – no automatic distribution.
  • Probate Court records are visible to the public – this means the potential for predators, unscrupulous family members, or even nosey neighbors, can know what your child has inherited

Why a Revocable Living Trust?

Many parents and grandparents opt for the flexibility and control of a Revocable Living Trust:

  • The person(s) you select, not the court, will be able to manage the inheritance for your minor children or grandchildren until they reach the age(s) you want them to inherit--even if you become incapacitated.
  • Each child's needs and circumstances - even special needs - can be accommodated, just as you would do.
  • And assets that remain in the trust are protected from the courts, irresponsible spending, and creditors (even divorce proceedings).

For many folks, the absolute best solution is to keep the assets in trust for their lifetime or until assets get spent down. Assets that are trust protected are there for your child but can’t be taken from them. It’s hard to think about your children growing up without your guidance, but a revocable living trust can give your children needed financial protections should anything happen to you.  

Email or Call!

If you would like to learn more about creating an estate plan specific to you and your family call us for a free initial consultation at

(707) 937-2701

email me at debra@decarlilaw.com

or use our online calendar to schedule an appointment

https://calendly.com/decarlilaw/initial-consultation.

 

 

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