If you have kids who are still kids (i.e. minors), one thing that can be a crucial component of your will is a minor beneficiary trust – not giving them the money right away, but having someone else manage it until they can.
Minor Beneficiary Trusts
Imagine your kid inheriting a small fortune at 18. Can you picture it? How about 14? Probably not the best idea. In BC, minors generally can’t inherit directly and the funds need to be held in trust – either by someone you appoint or by the Public Guardian & Trustee – until the age of minority. A minor beneficiary trust keeps their inheritance safe until they’re more responsible, say in their mid-20s.
Choosing a trustee for your children can be simple. It can be the same individual as your executor or your guardian, but it can also make sense to separate these roles. Different people have different expertise and demands. Your trustee should be a trusted individual who is capable of steering the financial ship.
Disbursing the Inheritance
With a trust, you can appoint your executor or someone else to manage your money for your child. This doesn’t mean the money is locked up forever, but that your trustee will be able to follow your instructions about how to use it until it’s time to give the remainder to your now-adult child. This way, you can make sure it’s used for important stuff like school and healthcare – and presumably not buying a Porsche as soon as they’ve turned 16.
You can have flexibility about how you arrange it too. Some parents will want to provide some assets at 21, some at 25, and more at 30, with the idea that your child will have a chance to learn some financial responsibility before blowing their inheritance.
Leave the Complexity to a Lawyer
Because of the importance of setting up a minor beneficiary trust appropriately – and ensuring your specific expectations are met – will kits and other generated wills often can’t capture the complexity and specificity that you will need to ensure your children are appropriately cared for. Creating trusts isn’t exactly a walk in the park, and you don’t want to mess it up. You’ll want an estate lawyer to help you set up trusts that make sense for your situation.
In Conclusion
In the end, these trusts bring a dose of financial responsibility and security to your will. Knowing that your loved one will be looked after, even when you’re not around, is a big relief. It’s like an insurance policy for their financial well-being. Estate planning is serious, but it doesn’t have to be stuffy – it’s also about making sure everyone you care about has a bright and secure future.
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Disclaimer: This blog post is for informational purposes only and should not be construed as financial or legal advice. Consult with qualified professionals to create a personalized estate plan suitable for your specific circumstances.
