How to Leave an Inheritance for Your Minor Children
Since you do not know what age your children will be when you pass away, it is best to plan their
inheritance as if they have not reached adulthood at that time. You can always update your plan after
your children are grown. There are several ways to leave an inheritance for your minor children.
If the inheritance you wish to leave is small, a restricted account may be best. The funds in this account
can be used by a custodian or guardian to pay your child’s living expenses until he or she reaches
adulthood. At that time, your child will inherit what is left of the restricted account funds. If the
inheritance is large, you may not want to use this type of account if you feel your child will not be able
to manage the inheritance responsibly in early adulthood. Accounts of this type are generally created
under the Uniform Transfer to Minors Act (UTMA) in Washington and many other States.
If you are worried that your child will mismanage a large inheritance, you may wish to use a Trust to
bequeath funds and property. You can choose to have the trust pay out a lump sum at specific
milestones in life.
The downside to this type of trust is the cost to run it, including paying your chosen trustee. If your
child’s inheritance is not very large, the trust maintenance costs may eat away at the funds quickly. With
this type of trust, the lump sum payments, once dispersed, are no longer protected from your child’s
Another trust option, especially popular with larger legacies, is a lifetime trust. While your child is a
minor, a chosen trustee will manage the trust. You can stipulate an age for your child to take over as
The benefit of a lifetime trust is that you can use it as a generation skipping trust, or you can even
specify a person or charity to receive what remains of the trust upon the death of your beneficiary. With
a lifetime trust, as long as items remain in the trust, they are protected from your child’s creditors and
from divorce settlements. Like other types of trusts, a lifetime trust may cost quite a bit to run.
Experienced estate planning attorneys Seattle WA of the Byrd Garrett PLLC offers estate planning and
business planning resources to residents of Seattle WA. To learn more about these free resources,
please visit http://www.byrdgarrett.com today.