Working with families, elderly, and disabled to create & implement effective wealth protection strategies to give peace of mind without worry.
By Estate Planning Attorney Gary DeWitt. Gary is founder of the law firm DeWitt Law Firm, PLLC.
Estate Planning Academy Episode 19: Giving Money to Children
Give it to them directly as an inheritance
- If they are under 18, the courts may force the money into a trust or uniform account for minors.
- The court may name a financial manager, maybe at $100’s per hour, to manage the money.
- Then when your children turn 18, they get a lump sum payment.
- If they are 18 or older, then the money goes directly to your children, no strings attached.
- They can spend it on whatever they like.
- Nobody is managing the money to help them spread it out for education, house, retirement, etc.
Use a Uniform Trust Account for Minors (UTMA)
- This account will hold the money until they are 18, then give it to them in a lump sum.
- We covered what may happen when children get money at 18
Use a Revocable Living Trust
- You get to decide now how the money will be managed and spent.
- Do you want it invested towards education, home, then retirement?
- You make that choice.
- One favorite method is to pay for education for any semester they make a 2.0 or better GPA until graduation.
- When they graduate, help them out a little so they don’t acquire debt renting an apartment and setting it up.
- Then hold the principal until they are 25, 30, and 35 years old.
Serving Clients in Bella Vista, Bentonville, Rogers, Springdale, Fayetteville and all of Northwest Arkansas