One of the most important decisions many people must make during estate planning is how to leave an inheritance for their children. One of the more popular and reliable vehicles for bequeathing property to children is through trusts.
The consequences of not making arrangements for the proper management of an underage child’s inheritance could turn out to be a situation quite the opposite of what the parent or parents would have wanted. Indeed, if the parents haven’t made a suitable arrangement, a probate court will very likely step in and name a property guardian who will manage a minor’s assets until the child turns 18. A bequeather can avoid putting that decision into the court’s hands by naming a property guardian in a will or living trust.
If a parent sets up a trust, either individual trusts for each child or a pot trust for all of the person’s children, the assets would be handled by a trustee named in the trust, usually a trusted relative or friend and then turned over to the child or children at the ages specified in the trust.
A pot trust, also know as a family trust, affords the trustee great flexibility in determining what each child needs, but it does come with one major drawback. Since a pot trust does not end until the youngest child reaches the age of 18, all other older children may already be well into adulthood before they get control of their inheritance.
Whatever parents’ circumstances are, they should consult with an experienced estate-planning attorney, who will be able to help them select, and draft for them, the specific trust or trusts that best serve their intentions for passing on an inheritance to their children.