Determining the Timing of Your Children’s Inheritance

Estate planning is a crucial aspect of ensuring your assets are managed and distributed according to your wishes after your passing. Among the many considerations in this process is determining when your children should receive their inheritance. It’s a decision that involves balancing financial responsibility, maturity, and familial dynamics. The following are some key factors to consider when making this important decision.

• Age and Maturity: One of the most common approaches is to set an age at which your children will receive their inheritance. This could be a specific age, such as 25, 30, or 35, or it could be tied to certain life milestones, like completing higher education or getting married. The rationale behind this approach is that by reaching a certain age or milestone, children are expected to have developed the maturity and responsibility to handle their inheritance wisely.
• Financial Responsibility: Another consideration is your children’s financial responsibility. If you have concerns about their ability to manage a large sum of money responsibly, you may choose to stagger the distribution of their inheritance over time. For example, you could structure it so they receive a portion at different intervals, such as one-third at age 25, one-third at age 30, and the remainder at age 35. Alternatively, you could establish a trust that provides regular disbursements over their lifetime.
• Asset Protection: In some cases, you may have concerns about protecting your children’s inheritance from potential creditors, lawsuits, or divorce settlements. In such situations, setting up a trust can offer greater asset protection. A trust allows you to specify how and when distributions should be made, shielding the assets from external threats and ensuring they are used for the intended purpose.
• Individual Circumstances: It’s essential to consider each child’s individual circumstances when planning their inheritance. Factors such as their financial needs, career path, health issues, and family situation can influence when and how they should receive their inheritance. Open communication with your children about your estate plan and their expectations can also help avoid misunderstandings or conflicts down the road.
• Flexibility: Estate planning is not a one-time event but rather an ongoing process that should be reviewed and updated regularly to reflect changes in your family dynamics, financial situation, and legal landscape. As such, it’s essential to build flexibility into your plan, allowing for adjustments as circumstances evolve over time.

The question of when children should receive their inheritance in estate planning is a highly personal one that depends on a variety of factors. By carefully considering factors such as age, maturity, financial responsibility, asset protection, individual circumstances, and flexibility, you can create a plan that reflects your wishes and provides for the well-being of your children in the long run.

Danna Cannon of Cannon Legal Firm has nearly 30 years of experience with Estate and Trust Litigation matters. As an attorney, She has successfully administered, litigated, and settled small estates involving minimal assets, complex matters with assets in excess of $30 million, and everything in between.

It her objective to ensure that my clients are well-informed every step of the way, confident that their rights are being protected, and that all parties involved are treated with respect.

Learn more! Contact Dana Cannon at Cannon Legal Firm for a free, 30-minute, no-obligation consultation.