Those with children and grandchildren usually intend to leave assets behind when they die to support their loved ones. Children and other descendants are often the primary beneficiaries of modern estate plans, as testators frequently want to provide as many resources as possible for their loved ones and dependent family members.
Whether someone has minor children still in the home or adult children who already have independent lives of their own, careful estate planning is of the utmost importance for those who want their property to have a meaningful impact on their descendants after their death.
Planning for minor children
There are special considerations people must factor into their estate plans when their children are still young and dependent on the support of others. For example, testators may want to avoid leaving assets directly to their children, as a guardian or ex-spouse may then have control over that inherited property.
Trusts are often useful when leaving resources for minor children, as they prevent guardians and caregivers from accessing and squandering those resources while the children are still young. Some testators set aside certain funds, like their life insurance proceeds, to support the children while they are minors and separate assets in a trust for them to access as adults. Properly protecting the inheritance of minor children can be as important as choosing the right guardian to meet their daily needs when a parent dies.
Planning for adult children
Children who have moved out and now live their own adult lives may have already demonstrated that they have challenges that would affect their utilization of an inheritance. For example, they may have trouble managing their own money or a known issue with substance abuse.
Other times, a child or grandchild will be relatively responsible but in a relationship with someone who is unstable or abusive. The same tool that can preserve an inheritance for a minor child could also help protect the inheritance of an adult child from divorce and bad decisions. Moving assets into a trust can protect them from property division proceedings if a beneficiary divorces.
Testators will also have the option of imposing numerous restrictions on the use of inherited assets, which could prevent someone from squandering those resources are spending them on alcohol or other frivolous and even dangerous habits. Those who think carefully about the future risks for their beneficiaries may see the value in taking proactive steps to protect their inheritance.
It is often only by acknowledging both the impact the testator wishes to have on someone’s life and the issues that may prevent them from doing so that individuals can craft the most effective estate plans.