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Estate Planning
Give
it to them directly as an inheritance
- If they are under 18, the courts may force the money into a trust or uniform account for minors.
- The court may name a financial manager, maybe at $100’s per hour, to manage the money.
- Then when your children turn 18, they get a lump sum payment.
- If they are 18 or older, then the money goes directly to your children, no strings attached.
- They can spend it on whatever they like.
- Nobody is managing the money to help them spread it out for education, house, retirement, etc.
Use a
Uniform Trust Account for Minors (UTMA)
- This account will hold the money until they are 18, then give it to them in a lump sum.
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We covered what may happen when children get money at 18
Use a Revocable Living Trust
- You get to decide now how the money will be managed and spent.
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Do you want it invested towards education, home, then retirement?
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You make that choice.
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One favorite method is to pay for education for any semester they make a 2.0 or better GPA until graduation.
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When they graduate, help them out a little so they don’t acquire debt renting an apartment and setting it up.
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Then hold the principal until they are 25, 30, and 35 years old.