Inheritance And Kids
If you love your children, don’t leave them any inheritance. Jane, a client of mine, adores her adult kids. Of course, they are going through those things that people go through in their 20s — some relationships and some moving around –and she has some concerns about what would happen if she just left them her money. In her case, it’d be about $300,000 to each of her two adult kids. You certainly can just give them the money. That’s probably the most common course of action, and there’s nothing wrong with that. But consider an alternative.
The alternative is, instead of giving it to them directly, you say I’m going to give it to you when you’re 40, or something like that. Make up an age. Something law offices do all the time is to create a right within a will or a right within a revocable trust. You can do this as just part of your plan. In fact, it usually doesn’t cost anything extra for the lawyer to do it. They’re probably planning on doing something like this anyway. And what you say is, I’m giving all my money to my kids. But if they’re under age 30, for example, we’re going to hold on to it for a little while, and we’re going to make payments to help them. We’ll pay for any healthcare expenses or educational expenses, and we’ll pay for some generals, living in support.
You need a trustee. You need someone you trust who can manage that money and be the wall between them and their inheritance. But you can really create any rules you want you can create a stipend, you can say they don’t get anything until they’re a certain age, and then you can say when they’re 30, or 35, or 40, or 25, or 18, or never. You can say whatever age you want or no age for life. You can manage it if you wish, and you can say they don’t get it, and then when they’re 35, maybe they get whatever is left. Do that when you have any concerns about people making decisions that might not fall within your values for your money.