In many cases, estate planning occurs when someone’s children have reached the age of majority. They’re already 18 years old or older, so it’s just a process of transferring assets to the next generation. They are allowed to inherit property, so parents can opt to leave them property via a will or trust.
However, many parents also begin engaging in estate planning when their children are still minors. It’s often wise to begin estate planning at this time so that there’s a plan in place for these children if it’s needed. But how would they actually receive their inheritance if they’re not yet 18?
Using a conservatorship
In some cases, a conservatorship will be established. In this situation, a conservator is appointed to help that minor heir with the assets left to them by their parent’s (or parents’) estate. Oftentimes, a conservator is related to the child – such as an uncle or an ant – but that is not required. They just have to be a trustworthy adult who can help the minor manage their affairs until they’re old enough to do so on their own.
Using financial accounts
In some cases, money will be put into a financial account for the minor. This could be a 529 account, for example, which is an educational account. It provides some tax advantages. Eventually, the money can be used for future tuition costs. If a parent passes away without leaving any directions, the money that is supposed to go to their child may be put into one of these funds so that it is used appropriately.
Using a trust
Of course, parents also have the ability to set up trusts for minor children. When they pass away, money or other assets will be transferred into the trust. Much like a conservatorship, a trustee will be appointed to manage these funds. Exactly how long the trust lasts will be up to the person who creates it. For example, some parents will wait to have certain assets distributed until their child is 25, not 18.
Distributing assets to minor heirs can be a bit more complicated than an asset transfer would be in other situations. It’s quite important for those who are involved to understand their legal options. Seeking legal guidance during the estate planning process can be very helpful, as a result.