If you are thinking of leaving a minor a substantial inheritance you may want to consider leaving it to them in a trust for their entire lifetime. The benefits of creating a trust like this are:
- You can set up the trust to work as a generation skipping trust and not only avoid estate taxes in the estate of the beneficiary, but in those of the beneficiary's descendants.
- You can protect the assets held in the trust even when the beneficiary becomes an adult. This will protect the trust assets from divorcing spouses and lawsuits.
- You can have control over remaining trust assets if the beneficiary dies before receiving all of the assets.
- You can use a third party Trustee until an age when you might feel the minor beneficiary will become responsible enough to handle full control of the trust on their own.
Of course, this type of trust can also have added expenses for accounting, legal, and Trustee fees. So, make sure to weigh the costs against the amount of the inheritance.
Consult with a professional estate litigation Attorney for more information regarding this kind of trust.
*This blog entry was not written by an Attorney and should not be constituted as professional legal advice.