Many parents who wish to leave assets to their minor children are understandably nervous about the financial implications of this decision. However, there are several ways to ensure that your children will be able to live comfortably after you die—even if they inherit very little money.
In this article, we take a look at how to leave assets to minor children. Follow the steps and directions in this article to ensure you follow all legal implications while leaving assets for your children.
Leaving Assets for Minor Children
To begin with, you must consider what kind of assets you have and how much they’re worth. If your estate is small, you can leave it all to them outright, or you can set up a trust fund that allows them access to the money at any time during their lifetimes. In either case, they need to understand what’s happening with their inheritance so that they know how much money is coming their way and can plan accordingly.
You should also think about whether or not there are any specific requirements about how those funds need to be spent or invested once they’ve been handed over to the minor children. Consider including language in the trust agreement stating that all interest payments must go back into the fund so it doesn’t sit idle while waiting for an heir.
Leave a Will or Trust
You can choose between leaving a will or forming a trust to transfer your assets to minor children. For those who don’t know, your will is a legal document that helps determine how your physical assets are distributed after you die.
A trust is also a legal document, similar to a will, administered by an independent third party (called the trustee). The primary difference between these two types of estate planning documents is that trusts can also be used as executors’ accounts for minor children who cannot qualify for probate.
Steps to Follow
You can follow the steps below when leaving your assets for minor children:
- Write a will.
- Make sure the will is up-to-date and signed by both you and your spouse.
- Notarize it through an attorney, or have someone with authority sign on your behalf (e.g., an adult child). This step protects against fraud in case someone tries to forge your signature after death and makes sure that no one else can claim ownership of assets after you die without first getting permission from those named in the document (i.e., minors).
- File this document with the court within 30 days after filing it with yourself; otherwise, they may invalidate it on appeal due to late filing if they find out later than this deadline passes during litigation over estate distribution rights between spouses/children.
Factors to Consider While Leaving Your Assets for Minor Children
When deciding whether or not to leave your assets to minor children, you should consider the financial implications of doing so. Your assets will be distributed according to state law if you don’t leave a trust or a will before you die. These laws may vary depending on the state where you live and even the legal jurisdiction within that state.
You should also be aware of any tax consequences arising from leaving assets directly to minor children (as opposed to through a trust).
All in all, here are a few things you need to discuss with your financial advisor before making any final decisions on how you want to leave your estate.
Speak with the knowledgeable lawyers at the Bourassa Law Group if you want to leave assets over to minor children smoothly. Call us at (800)870-8910 for a free consultation!
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