Protecting Immature Heirs

Protecting Immature Heirs

What if a person wants to leave an inheritance to a person who is not yet mature enough to handle that inheritance? That may be a minor child.  But it may also be a younger adult who has undisciplined spending habits.

This can be dealt with in a couple of different ways.

First, the inheritance can simply be deposited with a “Custodian” appointed under the Idaho Uniform Gifts to Minors Act.  That Custodian will hold the inheritance until the heir reaches age 21.  At that age, the inheritance will then be handed off by the Custodian to the heir.  Although this approach lacks flexibility, it can be set up in a Simple Will.

Second, if a Trust is created, the trustee of the trust can be instructed to hold the gift until the beneficiary reaches the age (or ages) at which the handoff is to occur.  So, for example, the trust could specify that 10% of the gift is to be handed over to the heir at age 22.  Then an additional 20% can be paid out at age 26.  And the balance can then be handed off at age 30. 

Gifting in installments like this can train the heir at a younger age to be careful with the inheritance.  That way, when the bulk of the inheritance is delivered at age 30, the likelihood of the heir handling it well increases dramatically.

Another advantage of the use of a Trust is that, as the heir is growing up, the funds can be used by the Trustee to help raise and educate the heir along the way.   A gift in a Simple Will to a Custodian typically lacks that flexibility.

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Author: Barry Peters. For additional easy-to-understand information on Wills, Trusts, and Probate, call attorney Barry Peters’ offices at (208) 939-2600 for your expedited appointment for a FREE OFFICE CONSULTATION or visit his Q & A pages at BarryPeters-Law.com/common-questions. As always, your total satisfaction is guaranteed by Barry Peters, Attorney at Law, where all clients receive individual attention to the details of their unique circumstances.



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