How To Leave Money To Minors In Your Will

When you are planning your will, ensuring your minor children are cared for is a top priority. However, you have to be careful as you make your plans. You do not want to make any mistakes that can cause problems for your children receiving their inheritance. This is why naming a minor as a beneficiary for certain assets may be a mistake. Here are some things you need to know.

Why Is Naming a Minor a Beneficiary Not Ideal?

Naming a child as the beneficiary of your life insurance, retirement accounts, bank accounts, and the like can be a huge mistake. For example, if the funds in the asset are over a certain amount, a guardian ad litem may have to be named by the court for the child to have access to the money after your death. This can cost extra money in court costs and eat into your child's inheritance.

Another issue with leaving the assets to a minor child is the fact that they get the money as soon as they reach the age of adulthood. Even though the child is technically an adult, they do not always have the maturity level to properly manage a large amount of money, especially if you intended for them to use the money for an education or a home later in life. In addition, any money you leave your child can prevent them from receiving financial aid for college if it looks like they have a high amount of assets in their name.

How Can You Leave Your Child Money in Your Will?

If you want to ensure your children get your assets without any issues, there are some things you can do. First, place the inheritance in a trust meant for minors. A trust allows you to choose someone to act as a trustee. This person will manage the funds in the trust and can only use them for the reasons you name in the will. A trust for minors makes sure that all money in it will go to the benefit of your child. You also should avoid naming your minor child as a primary beneficiary of your life insurance. Instead, place the insurance benefits into an irrevocable trust naming your children as the beneficiaries. These trusts follow special guidelines that ensure the timing of the distribution of the funds to your children.

As you prepare your will, make sure you are working with an attorney to ensure your children receive as much of your estate as they can. Reach out to a will attorney near you to learn more.