When you create an estate plan, you can designate an age your children will receive their inheritance if you and your spouse die before your children have reached adulthood. Though it is a difficult question, it is necessary. Under the law, children cannot officially own their assets until they are 18. That being said, do you really want your children to have complete control over their inheritance the second they turn 18?
Protecting Your Children from Themselves
It might sound silly, but protecting your children from themselves is an important step during estate planning. Since the average 18 year old is not responsible enough to manage money, let alone a large sum of money, it is imperative you consider a few of these estate planning tips to protect your child’s financial future and preserve their inheritance:
- Consider having someone else manage the funds until your children turn 21, 25 or even 30.
- Discuss financial responsibility with your children, especially in terms of budgeting, excess spending and financial planning.
- Consider placing your child’s inheritance in a trust that will have scheduled pay-outs rather than a lump sum of money. This can prevent them from going through their inheritance too fast.
- Have an accountant oversee your child’s inheritance and assist them with budgeting and financial planning.