How to Help Children Manage Their Inheritance

An important part of a parent’s estate plan is ensuring that money left to your children is properly managed. This is especially important when your children are too young to understand how to manage their finances or not yet mature enough to do so responsibly.

(Photo credit: Tobyotter)

A common solution to this problem is to create a trust for your children and leave your assets to the trust. When a donor leaves assets in a trust, he gives a person know as the trustee the ability to manage the property. However, the children listed as the beneficiaries still have the right to the assets, and the trustee is required to manage the assets in the best interests of the trustee.

Make sure to choose a trustee who is responsible and has the time available to properly manage the trust.  You can choose a trusted family member, friend, or hire a professional trustee. Either way, the trustee has a legal duty to beneficiaries, and is not allowed to make personal use of the assets.

Also, makes sure to take the time to carefully plan out the provisions of your trust. With a few customizations, you can ensure the trustee will manage your assets and disperse them to your children in accordance with your wishes. This includes granting the trustee wide discretion and decision-making power, providing specific provisions for key expenses like rent and tuition, or setting up scheduled disbursements to the trustee in predetermined amounts.

If you have questions or would like assistance setting up a trust, feel free to contact us at (626) 696-3145.

Enhanced by Zemanta

Request A Consultation

"*" indicates required fields

This field is for validation purposes and should be left unchanged.