If you are fortunate enough to have a moderate to large estate you must use particular caution when creating your estate plan to ensure that your assets are protected both now and in the future. If you have children, you may plan to pass down your entire estate to them when you die. As a parent it is understandable to want to leave everything you worked for over the course of your lifetime to your children; however, should you give your children a lump sum in your estate plan? Ultimately, that decision is yours to make; however, there are several reasons why you may wish to think twice about doing so.
Legally, your children cannot inherit anything from you until they reach the age of majority (18). If you die before then, any assets you gift to them will have to be held in trust until they are old enough to receive the assets. Just because the law says your child can inherit at the age of 18 though doesn’t mean it is a wise idea to give an 18 year old a lump sum of money. In fact, it may not be a good idea to ever give your children a large sum of money. Take, for example, what Microsoft founder and Chairman Bill Gates has to say about giving children large sums of money — “I definitely think leaving kids massive amounts of money is not a favor to them.” Gates only plans to leave his children $10 million each – a significant fortune to most of us but considering his net worth exceeds $65 billion it is only a drop in the proverbial bucket for Gates.
Whether or not it is wise to give children the majority of your fortune or not is a decision only you can make; however, if you do plan to gift significant assets to your children you should consider leaving those assets in a trust and staggering their inheritance. We all continue to grow and mature throughout or 20s. With few exceptions, a 30 year old is better equipped to handle a large sum of money than an 18 year old. By leaving assets in a trust you are able to direct that the assets be disbursed in increasing amounts as the beneficiary ages and matures. By doing this you protect your assets from being squandered and you protect your children from falling prey to both immature decisions and unscrupulous people who would take advantage of a young heir or heiress.
If you have additional questions or concerns about incorporating a trust into your Illinois estate plan contact the experienced Illinois estate planning attorneys at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.
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