There are several invaluable reasons to create a trust, especially if you have young children. After an estate planning attorney has established a trust, you can place your assets, money, and property inside it. By doing this, you are funding the trust. When you pass away, a trustee distributes these assets per your instructions. If you have a young child, you can choose when and how they inherit the contents of the trust.
Anyone who creates something like a revocable trust will not be short of options regarding how their assets can be distributed to their children. If your children are older and are established, you may opt for giving them a lump sum when you pass away. Others may choose for their children to inherit a specific percentage of the trust upon reaching a certain age or achieving certain milestones, such as college graduation. You can earmark money in the trust to pay for education from the elementary level up to the post-graduate degree or for tradeschools or other educational opportunities. Trust funds can be used for healthcare expenses or as a well-wish gift after the child is married. The possibilities are truly endless.
Importantly, you can allow your trustee to use his or her judgment to determine if the beneficiary is mature enough to handle distributions outright and free of trust or if trust monies should be paid directly to the beneficiary’s creditors so that the beneficiary is protected from making poor financial decisions. Don’t feel pressured into choosing only one option because skilled estate planning attorneys can incorporate multiple methods of distribution based on your unique needs and goals.
The Right Age
If you leave a considerable amount of assets to your children, how old should they be before receiving them? There is no definitive answer to this question, but we can help you determine the decision that fits your unique situation.
Here are some things to consider:
- The beneficiary’s age
- The child’s maturity level
- Special needs or disability of the beneficiary
- Creditors
- Spending habits of the beneficiary
- Your goals for the child (e.g., education or career)
- The amount and type of inherited assets
Select Law Partners, PLLC
These considerations impact the right age for the beneficiary to inherit outside of the trust. It is common for clients to default to ages 18 or 21. At Select Law Partners, we always encourage people to wait until the child is at least 25 years old before giving them the option of managing their full inheritance. This allows the child to mature and even make a few mistakes before they are given full control of their inheritance.
Each situation is different, but we look forward to learning about yours. Contact the attorneys at Select Law Partners, PLLC, to schedule a consultation with one of our estate planning lawyers.
Sara Josey
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