Don’t you want to protect the money you leave to your young children?
When you were 18 years old, did you know everything you needed to know about how to manage your financial affairs? Well, Louisiana law presumes exactly that! If you die without a will and your child inherits your estate, he or she gets full access and control over everything at 18. Sound like a good idea?
In your will, you can raise that age to any age you choose. In the will, your attorney can create a basic trust that protects your child’s inheritance by placing it under the control of someone else – a trustee. The trustee doesn’t own the inheritance. He or she can’t use it to buy a summer house or go on vacation. Rather, the trustee manages the money in prudent investments and is authorized to use the money for the benefit of your child. Maybe you want a bank to be the trustee and are willing to pay for this service. More likely, you may have an Uncle Bob who is an accountant that could be suited for the job. Or maybe your sister is just good with money. Family members can serve as trustees and often do it for free.
Your trustee can manage the inheritance properly and ensure your child doesn’t blow it on cars, vacations and video games. The trustee can, however, buy a car or a video game if the trustee believes it is the right thing to do. The trustee can (or in some cases must) pay an allowance to the child. And the trustee certainly can use the money in the trust for things like college expenses and clothes. Depending on how you feel about the subject, especially considering the relative maturity of your child, you get to write into the trust at what age the trust will close and thus at what age your child can take over complete control. With a Louisiana will, you have the ability to appoint a more seasoned adult to manage the investments until the child reaches, for example, the age of 25. Doesn’t this sound like a better idea? Perhaps not to your child. But who knows your child better than you?
In addition to extending the period of mandatory management of a child’s inheritance from 18 to whatever older age you prefer, your will can also create a check and balance system over the guardian of your minor children. This is not always or even usually necessary, and may not be the right choice for you. But depending on your situation, it might be a big deal. If you recall, the court will appoint a guardian if your minor children are orphaned. That person takes personal care of the children – houses them, feeds them, makes medical decisions for them, and ensures they go to school. In your will, you may also make that same person the trustee of the children’s inheritance, meaning that guardian calls all the shots with the children’s life and money. If the guardian is a responsible person and good with money, that may be the best decision.
However, if the guardian is a great caregiver but terrible with money, or if you want to make sure someone else is involved and watching over the situation, you can appoint another person to be the trustee. In this situation, the guardian has to go to the trustee for permission to buy things using the inheritance fund. That could be a major protection for your children if the guardian is not so experienced with investments or if you want a check and balance system. Your attorney can draft your will with these issues in mind. It offers you great flexibility to craft what makes the most sense for your unique family situation.
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