How to leave a legacy for your minor children
Since you do not know how old your children will be when you die, it is best to plan their inheritance, as they have not reached adulthood at this time. You can always upgrade your plan after your children have grown up. There are several ways to leave a legacy for your minor children.
If the legacy you want to leave is small, a small account may be preferable. The funds from this account can be used by a guardian or tutor your child to pay living expenses until he reaches adulthood. At this instant, your child will inherit from what there remain funds consider restrained. If inheritance is important, you can not use this type of account, if you feel that your child will not be able to manage inheritance in adulthood. Such accounts are usually created under the uniform transfer to minors Act (UTMA) in Washington and many other states.
If you fear that your child will mismanage a large inheritance, you can use a trust to bequeath funds and property. You can choose to have the confidence to pay a lump sum at specific stages in life.
The disadvantage of this type of trust is the cost to run, including the payment of your chosen trustee. If the legacy of your child is not very high, maintenance costs can trust biting funds quickly. With this type of trust, lump sum payments, once dispersed, are more protected against creditors of your child.
Another option of confidence, especially popular with the greatest legacies, is a living trust. Even if your child is a minor, a trustee selected will manage the trust. You may specify an age for your child to take over as trustee.
The advantage of a trust life is that you can use as a generation skipping trust, or you can even specify a person or a charity to receive the remainder of the trust upon the death of your beneficiary. With a living trust, so that the elements remain in the trust, they are protected against creditors of your child and divorce settlements. Like other types of trusts, a living trust may cost a bit to run.