Estate planning when your children are minors (under the age of 18) can be a challenge. Most parents are concerned about their minor child managing an inheritance at such a young age. Wills with testamentary trusts for minors may be a viable option to help solve this issue.
Wills and Probate
A Will is a set of instructions to the Probate Court for what to do with your probate assets when you pass away. A “probate asset” is an asset owned individually in your own name, meaning, there are no joint owners (on real estate or financial accounts), no beneficiaries listed and the asset is not held in trust. In order for this property to be inherited, it must pass through the public process of Probate. Probate in Massachusetts takes at least one year, and in a post-COVID world, it can take even longer. (Click here to read more about Wills and Probate)
Will with a testamentary trust for minors
When you are planning your estate while your child is a minor, a revocable (or living) trust is a valid option. This type of trust can be managed, changed, and utilized while the parent is alive and typically serving as the primary Trustee. When the trust is properly funded, a revocable trust helps avoid the public and time consuming process of Probate. A Revocable Trust will name a successor Trustee, who will step forward upon the death of the parent and manage assets to ensure that they are used for the child’s benefit, providing them with funds necessary to support them in a timely manner. (Download our eBook on Trusts for more on Revocable Trusts)
If, however, a revocable trust is not your choice, a Will with testamentary trust for minors is the next best thing.
A Will with testamentary trust for minors only goes into effect when the parent has passed away, so it is not able to be utilized while the parent is alive. It is written so the qualifying assets go through probate, and then a Trust is created and funded with those assets for the benefit of the minor children. The named Trustee (often a trusted family member or friend) will be able to manage the funds. When creating this kind of Will, the parent usually determines an age that the children can get a lump sum out of the trust. For example, when a child turns 25, they may receive one half of the existing amount, and the remainder at the age of 30. A trustee often can distribute money to a child for important reasons, such as, paying for college, medical expenses and/or living costs.
In the event they are not around to provide for their child, a parent typically wants to make sure their child is taken care of. Talking to your estate planning attorney can help you weigh the pros and cons of each option available to you.
Founded by a nurse attorney and with offices in Acton, Burlington, and Sudbury, Massachusetts, Generations Law Group helps families navigate the complex areas of estate planning, elder law, and probate to inform and protect loved ones of every generation.
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