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Estate Planning for Minor Beneficiaries

As a parent, you want to make sure your children are taken care of after you die. That is why it is crucial to have a strong estate plan in place that will protect your family’s interests. In this blog, we explain what you need to do to set up your estate for minor beneficiaries.

What Types of Trusts Should I Use for Minor Beneficiaries?

With a trust, the assets that you want to transfer to your minor beneficiaries will be overseen by a trustee. The trust agreement contains specific instructions for the trustee to follow regarding how the assets should be managed and distributed.

The following are types of trusts you can use if you have minor beneficiaries:

  • Testamentary Trust: This type of trust is created under a will, though it does not technically exist until the creator of the will passes away. After the will-maker dies, the testamentary trust is created through probate, which can take months or even years to complete. Because probate will make the will public, testamentary trusts might not be the right option for your estate.
  • Revocable Living Trust: There are a few benefits to using a revocable trust. In particular, it can be used to avoid probate and also prevents delays in the distribution of your assets to minor beneficiaries.
  • Irrevocable Trust: If you want to transfer wealth after you are gone, an irrevocable “Gifting Trust” might be right to you. This trust is useful if you want to leave your minor beneficiaries annual, or lump sum gifts.
  • Irrevocable Life Insurance Trust: If your estate needs additional tax protections, an irrevocable life insurance trust can be used to eliminate the death benefit of an insurance policy from the estate. This can possibly save you and your minor beneficiaries a substantial amount of money on estate taxes.

When choosing a trustee to oversee your estate, remember the following things:

  • Financial expertise is not necessarily required.
  • Think about the health and age of the trustee.
  • Sometimes it is a good idea to name more than one trustee.
  • Use a professional trustee if you are worried about potential conflicts that can impact the distribution of your estate.

Call an Estate Planning Attorney in Prince George's County at (301) 281-4817

If you have more questions about planning your estate for minor beneficiaries, you should get in touch with our legal team to find out how we can assist you. At Gray Legal, P.C., we are dedicated to helping families in Largo, Hyattsville, and Bowie with all of their estate planning needs. We can review your situation and create a plan that will ensure your property and assets are fully protected.

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Call (301) 281-4817, or contact Gray Legal, P.C. today to schedule an information session with our estate planning lawyers.