Regardless of the age of your children when you pass away, they will receive an inheritance unless you explicitly choose to leave them out of the will. However, if you pass away while your children are still young, arrangements need to be made so you can make sure that their inheritance is properly managed.
Your Child Will Usually Not Receive the Full Inheritance
If you have an inheritance, it is not simply given to your child. Instead, the state makes sure to control access to your assets until your child is at least 18 years old. Often, the courts are required to choose among several competing relatives. However, you can avoid this fight by clarifying your intentions in your will. By writing a will, you are able to determine who will be in charge of the estate until your child turns 18.
With a will, you're also able to determine when your child is able to take control of the estate. This could be when your child reaches a specific age, when he or she finds a full-time job or when he or she graduates from college.
The Role of Your Spouse
If you are married, you might choose to have your inheritance simply go to your spouse. Then, your child could become an alternative beneficiary, which is important in a situation where both you and your spouse pass away.
Setting Up a Trust
Another approach is to setup a trust for each of your children. You will name a trustee who will be responsible for handling the money of each child until they reach a specific age. The trustee is responsible for following the instructions and acting in the best interests of the beneficiary. Being a trustee is more work than simply being a custodian. The trustee is responsible for filing annual tax returns for the trust.
There is no one-size-fits-all solution for each child. The best option will be based on factors such as your child's maturity. If your child is very mature, he or she may actually benefit more from receiving the full inheritance when he or she is 18, since the funds can then be used for something beneficial, such as investments, college, or the starting of a business. As situations change, you may make modifications to your will based on the long-term goals of your child. For instance, you may initially require that your child attend college before receiving the inheritance, but you may later realize that college is not right for your child. Regardless, you should work with probate services to create the right will for you.Share