While it is not the most pleasant subject for adults in New York to think about, preparing for your death is important to securing the future of your children. You do not want to wait until it is too late to plan for how your children will inherit your assets. That is why now is a good time to consider how to make the best trust for your children while avoiding possible pitfalls.
An article run on the CNBC website lays out the possible problems that can arise with creating a trust. One of them is giving your children too much from the trust too early. When your children are young, it is natural to set an early date, such as eighteen years old, for them to receive money from the trust. However, you do not know how responsible your children will be with money until you have watched them grow into adolescence and then into young adulthood. As your children grow older, you might observe that they are not ready for sudden inheritances of substantial amounts of money.
A possible solution is to put off releasing large portions of money from the trust until the children are of an age that satisfies the parent. A parent can see to it that their children will receive some money in their early adult years while keeping the bulk of it for later. Some parents may elect to simply wait until their children are older to observe how mature and capable they are and then change the terms of the trust to delay large inheritances, but many trusts do not allow for this kind of alteration once they have been established. Sometimes a parent can give a trustee some latitude in releasing trust assets sooner if necessary.
Parents should also think about the specific needs of their children. Children vary according to all kinds of variables, from age to personality to medical needs to education, so it is important to consider how best to treat each child when it comes to their inheritance. For example, a child with special needs is likely to require long term assistance. However, while inherited assets from a trust may help the child, they can also count against Medicaid or SSI benefits. In such a case, attorney consultation may be necessary to navigate federal tax laws so your child does not lose out.
This article is intended to educate the reader on estate planning for children and is not to be taken as legal advice.