Consider creating a trust to hold your child’s inheritance. Whether you are married or a single parent, consider how to ensure that your hard-earned assets are used properly for the benefit of your child, and not misused or taken away.
Minor children cannot own assets, so if a minor is named as a beneficiary of life insurance and there is a surviving parent, the surviving parent will have to go to court to get permission to manage the minor child’s assets.
Establishing a trust can ensure that we avoid court as much as possible. A trust also allows parents to appoint a trustee to manage the child’s assets for the benefit of the child, as well as protect the child’s assets from misuse.
This trust for the benefit of your child is referred to as a “sub-trust” and rests within the revocable trust. It can be a successive recipient of your assets after your spouse.
These trusts can protect your children in three phases of life: 1) 1 to 18 years of age; 2) 18 to when you feel the child is responsible enough to manage a large sum of money; and 3) for the rest of the child’s life, to protect the child from people who may try to take away the child’s assets, such as creditors, predators and ex-spouses.
YIM & YEMPUKU LAW FIRM
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