People usually want their property and assets to go their spouses and children. However, what do you do when your child is under age 18? Are there ways your minor child can inherit if you die before they reach their majority? Fortunately, estate planning can address this situation to make sure your child receives the inheritance you want them to have.
Wills are one way to make sure your child receives an inheritance from you. However, children under age 18 cannot inherit directly. If your Will leaves money or property to your children, a guardian would have to be appointed to manage those assets until they reach age 18. At that point, the money would be handed directly to them, which is not always the best option.
If you fail to leave a Will, your child may or may not inherit. Florida’s intestacy laws provide that a surviving spouse inherits the entire estate in some cases. However, children may inherit part or all of the estate if the decedent’s children are from another relationship, or there’s no surviving spouse.
You may provide for a testamentary trust in your Will. Since the trust is created after your death, though, the assets used to fund the trust usually must go through probate.
A revocable living trust allows you to control the assets until your death or incapacity. At that point, your successor trustee would take over. Distributions would be made to your children as they reach age 18 or as provided in the terms of the trust. For example, if your child’s inheritance will be large, you may choose to pay out the trust in installments. In some cases, a spendthrift or discretionary trust may protect your child’s inheritance even into adulthood.
Florida recognizes accounts set up under the Uniform Transfer to Minors Act (UTMA). Your child’s inheritance can be transfer to a UTMA account. However, the money in the account typically is paid out to the child at age 18 without any protections in place. For a significant amount of money, or a child who is not financially savvy, this can be a problem. In addition, a custodial account may tie up money that could be used for other purposes and may be considered when calculating estate taxes.
Don’t leave your children’s future up to chance. Set up an estate plan that fulfills your final wishes for your family.
John Mangan is an experienced Florida estate planning attorney, who has been board certified in Wills, Trusts & Estates by the Florida Bar. Call Law Offices of John Mangan, P.A. at 772-324-9050 to set up an appointment or use our online Contact Form.