Those with children or grandchildren often want to ensure their comfort regardless of what the future holds. Naming a young adult or child as a beneficiary in an Arizona estate plan is one way to achieve that goal. Parents, grandparents and other concerned adults can allocate personal resources to help support their children or grandchildren if they die. They may want those funds to help the young beneficiary finish their education or establish themselves once they become an adult.
Unfortunately, the simplest means of leaving resources for children is also the least effective. While people can name children as beneficiaries in a will or estate plan, children do not technically own and have full control over their inheritance until they become adults.
Minors do not directly control inherited assets
If a child loses a family member who named them as a beneficiary in an estate plan, the minor does not directly control their inheritance. With a very exception of emancipated minors, most underage beneficiaries rely on their parents or guardians to manage their inheritances and other resources. The adult with legal responsibility and control over an underage beneficiary technically has full authority over their inheritance until they turn 18. That, unfortunately, means that some adults may abuse that authority and misuse someone’s inheritance.
Testators worried about how a co-parent might act after a divorce or concerned about leaving assets for a grandchild because their child has addiction issues may need to consider creating a trust. A trust can offer more protection when compared with relying on a will to provide an inheritance for minor children. A trust can name someone else to serve as the trustee controlling a minor’s inheritance until they become an adult. The trustor funding the trust can limit scenarios in which trust assets are accessible and usable. They can potentially preserve most or all of those resources for when the child becomes an adult and has the authority to control their inheritance themselves.
Learning the basics about probate and property law can help someone create an effective estate plan, possibly by adding a trust to their existing roster of documents. Testators who consider potential risk factors, like an adult misusing an inheritance, can take the right steps to achieve their legacy goals.