Never Leave Your Child’s Inheritance to a Family Member #trusts #inheritance

27 Mar 2023 · 1 min

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In this video, the presenter warns parents against naming a family member as the direct beneficiary of a young child’s inheritance, such as life‑insurance proceeds or bank accounts. He outlines several scenarios that could jeopardize the child’s assets: the family member could face bankruptcy, become embroiled in teenage conflicts, develop an addiction, get divorced, or have a spouse claim the money as their own. To protect the child’s future, he recommends establishing a trust that holds the inheritance until the child reaches adulthood. The trusted family member may serve as the trustee, but their authority is limited by the trust’s provisions, ensuring the funds are used only as intended. The video ends with a call‑to‑action to subscribe to the creator’s newsletter for more estate‑planning guidance.

Chapters

You should never leave your young child's inheritance to a family member. Some parents with young children think that the best way to leave their inheritance to their child if something happened to them was to make a trusted family member the beneficiary of their insurance or accounts. This is a terrible idea for these reasons. You may trust them totally, but you do not know what's going to happen after you're gone. What if they run into money problems such as a bankruptcy? What if when your child is a teenager, they start fighting and they can't get along? What if your family member develops an addiction or gets divorced and needs money? Or they marry someone who decides that the money is rightfully theirs. Because in reality, it is theirs. The better choice is to create a plan that would make a trust upon your death to hold this money for your child until they become an adult. Your family member could be the trustee of this trust, but they can only use the funds as they are allowed within the provisions of the trust. Learn more about this by subscribing to my newsletter in my profile link.