Providing for your children in the event of a premature death takes more consideration than picking someone to care for them. Additionally, you should also consider what will happen to any money or property your children inherit from you. Who will manage it for them until they became adults?
As is the case in most of the country, minors here in Toledo may not directly inherit property. If you leave an inheritance in your will to someone under the legal age, your executor will need to spend estate resources and time to appoint a conservator to hold the assets on behalf of the minor child until he or she reaches adulthood.
As experienced probate lawyers in Toledo, we have put together a list of tips to help with ensuring your legacy is left to the person you choose, even if they’re a minor.
If you create a trust with the minor as the beneficiary, no one can get to the assets during the life of the trust, including creditors, ex-spouses and anyone else who may want to attach the property or take advantage of your loved one. Furthermore, you decide when and how the trustee makes distributions. As an example, you may want to make sure that the beneficiary’s college tuition and books come out of the trust, but not money for a new car.
Moreover, you may decide to stagger distributions at certain ages. Perhaps you think he or she could handle the money later in life, so you stipulate that the trustee waits to make distributions until ages 25, 30 and 35 as an example. You also determine when the trust ends. Using the previous example, the trustee could fully distribute whatever assets remain at age 35, thus ending the trust. In the alternative, you may want the trust to last for your loved one’s lifetime and require smaller distributions periodically.
If you don’t believe the amount of the inheritance warrants the creation of a trust, you may put the money into a 529 account. The only problem with these accounts is that the money in them must go toward college education. If the beneficiary fails to go to college, the account must transfer to another, preferably college bound, beneficiary.
The other alternative is to open a restricted account under the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act. The primary caveat with these accounts is that the minor receives the full amount in the account upon reaching the age of majority, which is usually age 18 or 21.
With many of these specific options, especially financially, we suggest speaking with a professional before deciding which direction to pursue.
It’s possible that this information only made your desire to leave an inheritance to a minor more enigmatic and complex. Fortunately, you do not have to figure it out on your own. An estate-planning attorney in Toledo can review your situation, make a recommendation, and then assist you with implementing whatever path you choose. Contact us today for your free consultation.