If your minor child receives his or her inheritance outright then it's likely to be squandered. Your child depends on you for his or her support. His or her needs will not end if you die. They will become more dramatic. It’s critical that you plan for the possibility that you and your spouse may die before your child becomes an adult.
Minors cannot manage their property under Virginia law. The court may appoint a guardian of the minor's estate (hereinafter referred to as a conservator or conservatorship) to manage the property. Unfortunately conservatorship is inflexible, cumbersome, and unnecessarily expensive.
Wasteful conservatorship proceedings are a drop in the bucket when compared to the losses that can result when the conservatorship ends. Very few adults can prudently manage their finances. A spendthrift child who has suffered the emotional, psychological, and educational consequences of losing both parents is particularly unsuited.
The additional responsibilities can negatively affect his or her academic career. It’s hard enough balancing a full semester's work load. It’s even more difficult when you have to manage real estate and investments, balance a check book, and ensure bills are paid on time.
A trust can provide for the child’s support, provide incentives for the child to pursue a higher education, protect the child from his or her own inexperience, and shield the inheritance from creditors, such as plaintiffs, divorcing spouses, and the government. Determine what your estate would be worth if you and your spouse died tomorrow (don’t forget to include the life insurance). Then ask yourself how different your life would have been if you had received that same amount when you reached 30 years of age. It’s worth taking the time to plan. Contact us today and let a knowledgeable estate planning professional go to work for you.
Authored by Luke Anthony Lenzi, Esq.