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How do you leave a lasting inheritance for young children?

On Behalf of | Jun 29, 2022 | Estate Planning |

Most parents want to focus on their children in estate plans. However, while your children are still young, you may not have all of the resources yet that you hope to provide for them one day. Additionally, they aren’t in a position yet to manage financial resources of their own.

Your estate plan should reflect your children’s need for support and vulnerability. You can leave something behind for your children that will protect them, provided that you plan carefully. How can you ensure your plans will provide your children with help and resources if anything happens to you?

Choose a trustworthy guardian

Just picking your closest family member geographically may not be the right solution. You need to name someone that you can trust to put the children’s needs first and to appropriately handle their inherited property.

Being selective with the person who ultimately takes care of your children if anything happens to you protects your children from mistreatment and from a guardian potentially misappropriating their inheritance.

Consider creating a trust

Even the most trustworthy person can squander an inheritance over several years through poor financial management. If you want to make sure that there are resources for your children when they become adults and limit what a guardian can use the inheritance for, creating a trust could be the best solution.

A trust can help protect assets for years after your death and ensure that your children get the support they need. Trusts can also help them qualify for state aid or shield them from estate taxes.

Assess what you have to leave

You don’t want to leave your children with debt and no financial resources if something happens to you while they are still minors. Going over your property to perform an honest evaluation of your assets and debts is important, as is carrying enough life insurance to cover the cost of your funeral and pay off your financial responsibilities.

Frequently updating your plans to ensure that the right property passes to your children is as important as allocating enough assets to resolve your financial obligations.

Making children the focal point in your estate planning process can maximize the positive impact your plans will have on them.