Every parent wants to make sure their children will be taken care of if the unthinkable were to happen, and many grandparents or other family members often want their wills to include bequests to the younger generations in the family. However, there are special issues to consider when leaving assets to minors. Good intentions with poor planning rarely end with the desired results.
Assets for Minor Children
When planning for your children’s future, it’s important to consider what would happen if you and your spouse were to pass away. Who would care for your children and how would your estate be used for their care? Many parents assume that by naming a guardian for their children, the named-guardian will have access to the children’s inheritance in order to care for them. Unfortunately, that is not the reality.
In most cases, when the will is probated, the named-guardian takes legal responsibility over the children and the court maintains control over the inheritance. Then, when the minor turns 18-years-old, he or she receives his or her entire inheritance in one lump sum.
Assets for Special Needs Children
If a child has special needs, access to his or her inheritance becomes even more critical. When the Court controls the inheritance, each financial decision must be documented, audited, and finally approved by the court, and the child must be represented by an attorney. The process is slow, and the costs associated with the court proceedings will be taken from the inheritance. Depending on the circumstances of the child’s health, this may continue indefinitely for the beneficiary’s entire life.
Assets for Underage Grandchildren or Family Members
Whether it’s a specific bequest such as a home or jewelry or a general bequest such as a percentage of property or money, many family members make the decision to leave part of their legacy to the younger generations. If the inheritance is significant, it’s not uncommon for the court to get involved to ensure the child’s best interests are being protected. Investments and real estate add an additional layer of complexity, since the child is unable to conduct business in his or her name.
Proper Protection for Underage Beneficiaries
Each family requires solutions that address their unique needs and circumstances. In most cases, a trust resolves many of the issues discussed above by naming someone as trustee to manage the inheritance instead of the court. It allows for both flexibility and control, which is difficult to achieve with a simple will. Additionally, parents or other benefactors can establish restrictions for paying the inheritance, such as the age at which the child will inherit, a milestone for inheriting like graduating from college, or a schedule so as to avoid a single lump sum.
Get the Legal Guidance You Need
When planning for the future of your children, grandchildren, nieces, and nephews, you need to take steps to ensure that your intentions become reality. If you are involved in a disagreement or dispute that concerns assets left for the benefit of minors, special needs children, grandchildren or other family members, it is important to develop a strategy to resolve those issues. Begin the conversation with the attorneys at Gaslowitz Frankel by calling 404-892-9797.