Should You Leave Your Children Your Estate if They are Under 18?

Planning for the future is a responsible and essential step for every parent. When it comes to estate planning, one of the significant decisions parents face is whether they should leave their children their estate if they are under 18 years of age. At Kruse Law, Denyse D. Kruse will treat you and your child better than family. Kruse Law will provide a personalized approach to your estate planning in St. Petersburg

Protecting the Best Interests of Minors

When considering leaving an estate to minor children, it is crucial to prioritize their best interests. While children may inherit assets, it is best to establish a trust to manage these assets until the child reaches a suitable age.

Guardianship to Manage Assets

In Florida, if a minor is to receive inheritance in excess of $15,000, a special kind of Guardian must be appointed by the court to manage these assets for the benefit of the minor. This happens no matter the source of the $15,000. That is, if the child is receiving these funds as the beneficiary under a life insurance policy, annuity, bank account, through the probate court (whether there is a Will or not), a person will have to be appointed the Guardian of the Property to manage these assets. These guardianships become very costly because, in addition to the initial court proceeding to appoint the guardian, annual reports must be filed every year and approved by the probate court. This type of Guardianship can be avoided with the use of a trust. If a trust is used, the successor trustee of the trust will instead hold those funds for the benefit of the minor child, thus avoiding the need for the guardian to be appointed to manage the assets. 

Guardianship to Care for the Child

In addition to creating a trust, parents should also nominate a guardian to care for their minor children. The guardian will provide care, support, and guidance until the children reach adulthood. It is essential to choose a guardian who shares similar values and is capable of fulfilling the role effectively. By doing so, parents can have peace of mind, knowing that their children's emotional and physical well-being will be safeguarded. 

Please note that this type of guardian is the Guardian of the Person. This Guardian will have the legal authority to do things like enroll the child in school, take the child to a doctor, etc. This is a different type of Guardianship than is discussed above. 

Ensuring Financial Security

By creating a trust, parents can appoint a trustee who will oversee the management and distribution of the assets to their children. This arrangement allows for financial security while protecting the assets from being mismanaged or squandered. It ensures that the children's needs, such as education, healthcare, and general well-being, are adequately taken care of.

Controlling the Timing of Asset Distribution

Leaving assets directly to minor children may result in the assets being transferred to them when they reach the legal age of majority and the guardianship is terminated. However, many parents may feel that this age is too young for their children to handle a substantial inheritance responsibly. By establishing a trust, parents can specify when and how the assets will be distributed. Common options include staggered distributions at specific age milestones or for specific purposes, such as education or purchasing a home.

Protection From Creditors and Divorce

Another significant advantage of utilizing a trust is that it can protect the inherited assets from potential creditors or divorce settlements involving the children. In the event of financial troubles or a divorce, the trust shields the assets from being seized or divided, ensuring the children's long-term financial stability.

Kruse Law is Here for You and Your Estate Planning Needs in St. Petersburg FL

While it may be tempting to leave your estate directly to your children if they are under 18, it is crucial to consider the potential risks and benefits involved. Establishing a trust provides a structured approach to protect the assets and ensure that they are managed in the best interests of the minors. By appointing a trustee and specifying the terms of distribution, parents can exercise control over how and when their children will inherit their estate. Moreover, designating a guardian ensures the children's welfare is appropriately addressed. To make informed decisions about estate planning for minor children, consult with Denyse D. Kruse at Kruse Law, a specialist in estate planning law in St. Petersburg, Florida, today.