As you may know, the law considers kids able to receive an inheritance as soon as they turn 18. But, if your experience is anything like mine, it is easy to realize that 18 is a horrible age to come into an inheritance. I was certainly not emotionally mature enough to get an inheritance at the age of 18. But, how do you decide what age is appropriate?
Of course, there are no hard and fast rules; all kids mature differently and at different times. But, over time, and in working with lots of clients, our experience shows that most parents feel comfortable making an inheritance available to kids sometime around the age of 25, and in some instances not until they reach 40. You'll have to consider your own kids' maturity levels and your own principles and desires for when you want them to have the money you are able to leave for them.
The second question is, how do we make this determination? If the law says that kids can receive an inheritance at 18, how can we decide they should get it at a different age? The answer is putting those assets into a trust for the kids until they reach whatever age that you designate. For example, if your kids are 12 and something unfortunate happens to you, they wouldn't have access to money in a trust right away at age 18. While the money is held in the trust, you would appoint somebody to manage that money for them. This person could be one the people you've designated as their guardians. It could be a trusted financial adviser or other friend who you trust in financial matters.
Now, while the money is in trust, it's not inaccessible to the kids. It's just that access to the money is through the trustee, the responsible adult that you put in place to manage the money until they reach a certain age. So, don't think about it in terms of not letting the kids have the money. It's really about making sure that someone responsible is controlling access to it, and that it's used for the purpose that you want it to be used for.
When they reach the age you set, they can get all the money outright or you can decide to dole it out over time, depending on how much is in the trust. Maybe you want to give half at 25 and half at 30, or some other age, or in one-third chunks. You certainly have the ability to do that if you create a trust to hold that money. If you have questions about this or want to set something up for yourself or for your kids, feel free to reach out, and we'd be happy to help you.