It is essential to consider when your children should receive the money and property you’ve left for them. You could give them their inheritance once they turn 18, but many parents prefer to wait until their children are financially responsible enough to manage the inheritance. A common estate planning strategy is to create a trust to hold property for your child and appoint a trustee to manage it for them. The trust can specify when the assets pass to the beneficiaries and how they should be distributed. This blog will explore the main factors to consider when giving your children your inheritance.
Your Child’s Age
Your child’s maturity is, perhaps, the first consideration. Age and maturity are two different things. Becoming an adult at 18 does not translate into enough life experience for reasoned decision-making. While some children can handle money well at a young age, most cannot. Getting an inheritance before being mature enough to manage the money properly is like throwing money out the window. This can be problematic when the money is needed for important things like health care, everyday living expenses, and education. Additionally, receiving this money at a young age doesn’t teach your kids about the rewarding feeling of earning their own money, the strategy of budgeting, or the benefit of saving. Instead of directly giving your child their inheritance, you may consider creating a trust to hold the property. This way, you can appoint a trustee to manage the assets until your child is mature enough to handle the inheritance responsibly. The trust can specify when the assets pass to the beneficiaries and how they should be distributed.
How Your Child Has Managed Money In The Past
If your child is older when you’re planning your estate, they may have already demonstrated their financial habits. You may want to consider whether they save money for future needs, spend it on items you think are essential, and consider their purchases before making them. This can help determine whether they are financially responsible enough to manage an inheritance. You also want to consider life circumstances and the relationship with the beneficiary.
Contact Attorney Andrew Bucklin For Estate Planning On The North Shore, Massachusetts
There are many different aspects of the estate planning process. Andrew Bucklin, based out of Lynn, Massachusetts, wants to work with you to determine which options align best with your needs. Please contact me here if you need help setting up your estate plans and professional guidance!