Whether you are beginning your estate planning process or have developed a plan in the past and need to update it, choosing how to leave an inheritance to children is often one of the key questions you’ll have to face. While having minor children typically requires the creation of some kind of trust that will guard their inheritance until they are old enough to receive it, leaving inheritances to adult children is a different question. There are several options you may want to consider if you are facing this choice.
Inheritances don’t have to only come after you die. It’s possible to leave lifetime gifts, choosing to give now instead of later. If this is your choice you will want to be sure how much you plan on giving each child, either during his or her life or after you die.
Inheritances Through Trust
Creating a trust and transferring the inheritance to the trust for the benefit of your children is also one option you might want to consider. Some trusts have specific benefits that direct inheritances do not, such as protecting the inheritance from creditors or lawsuits. Trust will also allow you to direct the inheritance to be given in steps to ensure that it isn’t squandered all at once.
Many parents choose to give each child an equal inheritance amount, but this isn’t always the best choice. You may, for example, want to give a child who has a career with low income more than you would to a child who is far more successful.