When Does a Child Grow Up?

 Posted on October 29,2014 in Estate Planning

For years, the traditional age of inheritance has been 18. However, research may give some people a reason to rethink conventional wisdom in this important area.

In one recent study, only 15 percent of Millennials said they felt “grown-up” at age 21. Among females, the proportion was much lower (8 percent). Millennials were more prone to cite events like the first job after college or the birth of a child as the transition into adulthood. This recent survey confirms previous scientific research that the brain continues developing even in late adolescence, after people reach age 18. A British psychologist claims that 25, as opposed to 21, is a much more accurate threshold age.

New Inheritance Strategies

The fact is that many Kane County residents in their early 20s need funds to pay for college, start a family, start a business, and other very legitimate reasons. With what we now know about the brain’s development, Millennials’ own perceptions, and the horror stories about reckless inheritance spending, how can these needs be reconciled?

There can be a middle ground that protects your money and your children. The following estate planning suggestions may help:

• Staggered Inheritance: Place a provision in your will, trust or other document for your children to only receive a certain percentage of their inheritance at age 21; for example, the provision could be one-third at 21, one-third at 27 and one-third at 34.
• Income Stream: Instead of a lump sum distribution, arrange for the funds to be released in monthly payments or a similar schedule. Your beneficiaries have an income stream to pay bills, and they are less vulnerable to reckless spending.
• Specific Use: Include a provision that the inheritance can only be used for college tuition, property down payment, and similar life expenses. Whether or not such a provision is enforceable, it serves as notice that the funds should be handled with discretion and foresight.
• Non-Age Trigger: Instead of a number, use an event. If the beneficiary does not marry or enroll in college before a certain time, an age can be an alternate trigger.

Chances are you have worked hard to make sure that you have a legacy to pass onto your children, so help make sure that they use it to get a good start in life.

We live in ever evolving times, so it is important that your estate plan changes accordingly. Contact our Sugar Grove estate planning attorneys for a free consultation. The law firm of Law Office of James F. White, P.C. has over 40 years of combined legal experience assisting clients with estate planning matters.