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The Inheritance Of A Minor Beneficiary In Living Trusts
People who have underaged children and planning to create Living Trusts should seek the services of an estate planning attorney in Arizona for deeper insight.
Minor beneficiaries of living trusts are not yet legally prepared to inherit any assets, thus they would need assistance from an adult. That will be so until they are qualified to inherit property and assets. If you are the grantor of such Living Trusts, it is a course of wisdom to provide minor beneficiaries with a designated guardian. Otherwise, the court will have to intervene and designate an adult that you might not approve of.
You might be surprised to know that an underaged child’s parent does not automatically assume the legal role to manage such property and assets. Indeed, not arranging for a legal guardian of a minor beneficiary may present challenges and inconvenience when you pass away or are incapacitated. Of course, these matters are easy to anticipate when you have an estate planning attorney in Arizona to guide you.
But before we delve deeper into that, let’s take a quick dive and learn about Trusts and estate planning.
Living Trusts – What Are They?
A living trust, also called a revocable trust, is a legal document that allows a person to grant ownership of his or her assets to beneficiaries. The trustee is responsible for dispersing the assets as the trust creator, or grantor wants. Living Trusts can be permanent or temporary.
Do note that the grantor of a revocable living trust can change the trust anytime. The trustee retains ownership of the assets placed in the trust and pays taxes as usual. An experienced estate planning attorney in Arizona can provide valuable knowledge about which estate planning instrument is best suited for your current lifestyle.
Advantages Of Living Trusts
One distinct benefit of Living trusts is that they help you avoid court conservatorship and give you more options to keep your business and personal finances private. As such, Living Trusts can provide for the management of your assets after you pass away without having to go through a court process. This means that your family can avoid the time, expense, and publicity of probate.
You can use a living trust to:
- Save on taxes.
- Provide for family members with special needs.
- Protect your assets from creditors.
- Keep your affairs private after you pass away.
You might find it interesting that the cost of creating Living Trusts is typically less than preparing a will alone. Of course, Wills and Living Trusts are unique to the personal circumstances of the grantor and the cost of making these may vary from state to state. It is still the best course of action to consult an estate planning attorney in Arizona.
Estate Planning And Minor Children
You are not required to have estate planning when you have minor children. However, if you do have estate planning, it is important to choose a guardian for your minor children. This person will be responsible for providing for the child’s needs if something happens to you.
In the absence of a Last Will and Testamentor surviving parents or guardians, the task of designating a guardian for any surviving minor children is left to the local probate court. Although this is the legal way to do it, it may not be always in the minor beneficiary’s best interest. It is possible that the probate court will designate an individual that you do not approve of.
Child As Trust Beneficiary
There are a few things to keep in mind if you’re setting up a trust for a child beneficiary. First, you’ll need to get a tax identification number (TIN) for the child’s trust. You’ll also need to open up an account in their name and distribute the money as directed by the trust.
It’s also important to file a fiduciary tax return each year. This will help you keep good records of how the money has been invested and spent.
Finally, make sure that allocating and spending money is being done properly.
Truth is, all of these could seem very confusing. That is one reason why hiring an estate planning attorney in Arizona can have more pros than cons. That is especially true if you are creating a Living Trust with a beneficiary that is a minor.
Gifts To Children That Require A Property Guardianship
Any gifts to children that require a property guardian must be made before the child turns eighteen. A property guardian is appointed to manage money for the benefit of a minor until they are able to legally do so on their own. Property guardians must file formal accountings with the court showing how the money was invested and distributed, and in some cases, the money must be invested in certain, restrictive accounts.
Of course, a highly qualified estate planning attorney in Arizona can ensure that all regulations are complied with and the right documents are accomplished.
Keystone Law Firm And Living Trusts
What happens if you don’t designate an approved guardian for minor beneficiaries? Most likely, the court will appoint an individual to assume the legal role. Remember, minors are in no way mentally and legally capable of managing their inheritance.
As the grantor of a Living Trust, it is your responsibility to ensure that something that like never happens. Of course, you don’t have to plan it on your own. Having an estate planning attorney in Arizona from Keystone Law Firm provides you with valuable insight into estate planning. Such knowledge and experience can help you make informed decisions.
In making a Living Trust, the legal team at Keystone Law Firmwill not leave a single stone unturned. Everything has to be factored in, especially provisions for minor beneficiaries. If you have young children and are planning to create a Living Trust, give the firm a call and get a free evaluation.