“At what age should my child inherit money?”
It’s one of the most common questions that most people think when thinking about the future of their children.
The question may seem very simple and straightforward on the surface, but in reality, it’s quite complicated and needs careful consideration.
The decision parents take about their estate can potentially shape the course of life for their beneficiaries.
For instance, it’s not a good idea to hand over lump sum cash to a teenager. The good thing is that you have several estate planning options available.
Let’s find out more!
Estate Planning Options
A testamentary trust is a useful estate planning tool to distribute your assets to the beneficiary, i.e., your child as directed in the will. It only takes effect after you pass away.
The executor takes care of the probate process and follows the terms of the testamentary document to pass on your estate to your child.
A testamentary trust help preserving your assets for your children. Particularly, if your kid is a minor, it’s a great option to manage your estate until they reach a specified age.
Unlike a testamentary trust, a revocable trust is separate from a will. It involves creating a legal entity to hold ownership of an individual’s assets.
Typically, a close relative or friend is chosen as a trustee who manages your estate on behalf of your children until they reach a specified age. At that point, the assets will go to them directly.
A revocable trust also protects your assets from the creditors and irresponsible spenders.
At what age should a child inherit money?
It’s hard to determine a suitable age for your child to inherit money. There’s no guarantee that they will spend the money more carefully when they turn 25-year-old or reach in their 30s.
However, building a trust for your child can provide you with an opportunity to distribute your money in a way that you deem most appropriate.
You can put in specific language related to the inheritance of your assets and instruct the trustee to pass on your assets in segments.
For example, you can leave a specified amount of money when your kid turns 18, 25, and 35 to ensure they don’t end up losing money due to poor financial decisions.
In addition to that, you can add a stipulation to make the funds contingent on specific events, like completing a degree or securing a full-time job.
Alternatively, you can make provisions to pay for certain expenses like a student loan, wedding, medical costs, etc.
If you want to create a plan to distribute your estate in specific ways and looking for an experienced estate planning lawyer in Chico, California, get in touch with us today! At the Law Offices of Ron Marquez, our experienced attorneys will devise a will where you designate an executor, beneficiaries, and how your assets must be divided.
Call us at 530-332-8110 for a free case evaluation.
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