Most people will receive an inheritance at some point in their lives. Whether the amount is $10 million or $10,000, not everyone is prepared to handle a sudden windfall of cash. A common misconception is that when creating a will, parents have no choice but to leave their money outright to their adult or minor children.
However, that’s not necessarily the case. Parents can utilize a testamentary trust—a trust written directly into their wills—to hold funds back and ensure the money is used for specific purposes, such as education, housing, or other needs.
For guidance on setting up a testamentary trust or crafting a comprehensive will, a will attorney near me can provide advice tailored to your unique needs. This approach allows parents to protect their legacy while ensuring their children benefit from the inheritance responsibly.
Why You Should Think Twice About Giving a Lump Sum
Let’s say your child turns 18 tomorrow. Would you feel comfortable handing them a check for $500,000? Most parents would hesitate—and for good reason. Young adults are often not financially or emotionally prepared to handle large sums of money responsibly.
Studies have shown that many young people who receive a sudden windfall burn through it quickly, often with little to show for it. At Stone Arch Law Office, we’ve seen this happen time and again—money meant to help build a strong future ends up gone in just a few short years.
What Is a Testamentary Trust?
A testamentary trust is a powerful legal tool you can include in your will. It doesn’t go into effect until after your death, and it allows you to place conditions on when and how your children receive their inheritance.
How It Works:
- You name a trustee to manage the funds.
- You decide when the child receives their inheritance (age 25, 30, or even in stages).
- You outline how the money should be used—for college, a home, health care, or emergencies.
Instead of a young adult receiving a large sum all at once, the trustee helps distribute the funds over time in a way that supports the child’s long-term success.
What Age, If Ever, Is It Appropriate to Leave Your Children a Large Sum of Cash?
When you write your will, there is always an option to leave your estate to your heirs in trust rather than outright. This might be because you are worried that someone will take advantage of your spouse financially, or because you feel that your children may not handle a large sum of money appropriately. You may also feel that the funds should be used for something specific — perhaps for medical care, college, or just for financial emergencies. Increasingly, parents want to simply keep the cash out of their children’s’ hands until the child has reached a certain age where they will be better able to manage these funds for their own benefit.
There’s no perfect age that fits every family. Some parents choose age 25; others wait until 30 or 35. Some divide the inheritance in stages—half at 25, the rest at 35. What matters most is your child’s maturity and your confidence in their financial judgment.
Questions to Consider:
- Has your child shown they can manage money well?
- Are there concerns about spending habits, addiction, or risky relationships?
- Does your child have special needs or dependents to support?
- Is there a risk of lawsuits, divorce, or other financial vulnerabilities?
Deciding when and how to distribute assets is a personal and complex decision, and there’s no one-size-fits-all answer. Parents often grapple with the question of fairness when dividing their estate. Should each child receive the same? Learn more about this important topic by visiting our page: Should Each Child Get the Same?.
Recommended Age to Give Children Their Inheritance
Personally, I think a great way to structure your testamentary trust is to allow the trustee to make distributions for school and for medical costs at any time. When the beneficiary reaches a point of mental, emotional, and professional maturity, this is a great time for him or her to have access to the rest of the money. My opinion (generally) is that this age is in the beneficiary’s thirties . . . this provides enough time for the child to have his or her life, education, and career in order. The beneficiary may have priorities at this point that go beyond their own needs, such as purchasing a home or caring for children.
Why You Should Consider an Early Inheritance or Lifetime Gifts
If your financial situation allows, you might consider gifting part of your estate during your lifetime. This lets you:
- Supervise how your children use the funds
- Teach them about investing and saving
- Enjoy watching them succeed with your help
Though you will need to be extra careful of gift tax considerations when making lifetime gifts, this option can create a lot of enjoyment for both the person making and the person receiving the gifts. Remember, you don’t have to leave money to a beneficiary outright; you can delay their inheritance to any age you like via a testamentary trust.
Avoid Naming Minors as Direct Beneficiaries
Every family situation is unique, and that’s why it’s so important to speak with a qualified estate planning attorney. However, remember that naming a child directly on a life insurance policy or retirement account might seem easy, but it can cause problems. Minors can’t legally manage these funds, and a court may step in to control the money until the child turns 18. That often results in a lump-sum payout at a very young age—something most parents want to avoid.
A testamentary trust can solve this problem while giving you more control over how and when your child receives their inheritance. Learn more about why you shouldn’t name minors as pay-on-death beneficiaries.
Why Work with a Will Attorney?
Choosing a local attorney familiar with Minnesota law is key to crafting an estate plan that fits your goals. At Stone Arch Law Office, we work with Bloomington families to design inheritance plans that protect their loved ones—without overwhelming them financially.
Whether you’re drafting your first will or updating an existing estate plan, we can walk you through options like testamentary trusts, staged distributions, and other protective strategies.
Speak with Stone Arch Law Office in Minneapolis and Woodbury
If you’re thinking about your will or trust, don’t go it alone. A local will attorney near me in Bloomington, MN can help you create a plan that reflects your values and protects your loved ones. Whether your child is 8 or 28, there’s a strategy that fits—and it starts with a conversation. Book a call with our estate planning team today.
Philip J. Ruce creates wills and trusts for families who want to feel secure that their loved ones are cared-for. Philip is a trust and estate attorney based in Minneapolis, Minnesota. Philip is the author of Trustee University: The Guidebook to Best Practices for Family Trustees available at Amazon.com in paperback or Kindle edition (free chapter available here!) He also works with trustees and beneficiaries who need help with their trusts.
Reference: MetLife (March 13, 2025) “Testamentary Trust: Definition and How It Works”
