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The 3 ages of estate planning for your kids

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The 3 ages of estate planning for your kids

On Behalf of | Apr 21, 2022 | estate planning |

Your ideal estate plan will probably see you leaving your children your estate a long time in the future. Yet, estate planning must always countenance that things might not turn out that way, and you could pass away at any point in your children’s lives.

Here are some age-appropriate situations to consider:

You die when your kids are minors

Your children can neither inherit nor take care of themselves before they turn 18. Until then, they are the legal charge of an adult (although they can apply for emancipation in specific circumstances once they become 16). Right now, that adult is you, but if you were to die before they become adults, someone else needs to take over. If their other parent survives you, they typically fill the role, but you need to name a guardian in case something happens to them too.

You die when your kids are 18 or older, but still young

Giving a young adult a large amount of money is rarely wise as they likely lack the wisdom to manage it. The chance they waste it or that someone wheedles chunks of it from them is too high to risk. 

You can set up trusts to protect the assets until they grow older. You could also use a trust to ensure their education costs are covered, allowing your child to concentrate on finishing their studies without financial worries if you were to die halfway through.

You die when your kids are well into their working life

If your child earns well, you need to talk to them about how inheriting would affect their taxes. There are ways and times to transfer assets to reduce the tax liabilities. 

There is a lot to consider when estate planning. Getting help to understand the options can help you adapt yours as you go through life.