By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Estate Planning Attorney
Is a trust or will a better way to leave money to children? Say you have two(2) children ages 19 and 20. Parents are always wondering what’s best, especially when they are in their 40s and early 50s.
Let’s assume the parents have $400,000 of estate value. Legally, your children are adults – but young adults. If you leave them money through a will, they will get their inheritance outright. In my experience, it’s rare for someone of that age to know how to wisely handle a large sum of money. Some can’t do it at 30. Some never learn. And if and when your children marry, who knows what plans their spouses might have for that inheritance?
Therefore, I would leave it for your children in a trust. Direct the trustee to release money to them only for purposes you approve, such as paying off student loans, housing, education, health care, etc. You may also authorize the trustee to release certain amounts of money to them as they achieve certain milestones – for example, holding a full-time job for a year, graduating college, attaining a certain age, and so on.
Keep in mind that your estate plan is not static. As time passes, you and your children’s circumstances may change and you will probably wish to make revisions. Talk to an experienced estate planning attorney about the best option for you.
To discuss your NJ Estate Planning matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at firstname.lastname@example.org. Please ask us about our video conferencing consultations if you are unable to come to our office.