Parents and grandparents often choose children in their family as their main beneficiaries. They want to provide them with the support they need to make the most of their lives. When beneficiaries are adults, they can directly inherit resources with minimal complications.
However, when the selected beneficiaries of a testator are still minor children, the situation becomes more complex. Children are still subject to the authority of their parents. Their resources, including any assets they inherit, are subject to the control of their surviving parent or guardian.
Special planning is likely necessary to preserve an inheritance
Surviving parents and guardians appointed by the courts do not always uphold their duty to the children and their care. In some cases, they may squander the resources set aside for children by their parents or grandparents.
The best way to prevent the misuse of inherited resources before a child becomes an adult is often to establish a trust. When family members fund a trust, they can provide very clear instructions regarding the management and distribution of trust resources.
The trustor can prevent anyone from accessing trust resources until the beneficiaries reach specific ages. They can also impose very strict limitations on a parent’s or guardian’s use of trust resources while children are minors. Parents could even make arrangements for their homes to transfer into a trust to allow the children to live there without the surviving parent or guardian having the authority to sell the home.
Funding a trust is one of several ways to preserve resources for minor children. People creating comprehensive estate plans often need assistance selecting the right type of legal instruments to use, given their intended goals, and that’s okay.