Shielding Young Heirs
First, they can do nothing. If the parents pass away without a Last Will and Testament, the children will inherit the estate in equal shares. But the shares of minor children will be held until they reach the age of 18 years. Then, regardless of maturity, the child will get his or her share.
Second, the parents can utilize a Simple Will. In the Will, they can direct that the share of a young child will be held in the state until the child reaches the age of 21. Then, on the child’s 21st birthday, the child will receive his or her share. But utilizing Idaho’s statutes to hold the inheritance cannot extend past the 21st birthday. And, unfortunately, most parents are rightly of the opinion that a 21-year-old child will burn through the inheritance, squandering it on unfortunate purchases.
Finally, there is the Family Trust or Living Trust option. A parent can create a Family Trust. In the trust, a successor trustee is named who will continue to manage and disburse the inheritance after the parents have passed away. And the parents have pretty-much unlimited ability to set the distribution rules as they see fit.
For example, in an effort to ensure that the heirs are more mature when the inheritance is received, the parents can direct that the inheritance be withheld until the child reaches 30 years of age.
Or the parents can direct that the inheritance be paid to the child in installments. For example, 10% of the inheritance could be paid at age 22, another 20% at age 26, and the balance at age 30. In this fashion, even if the child burns through the inheritance received at age 22, the bulk of the inheritance will be held for a second and third chance at the older ages. Since we all tend to learn from our own mistakes, this approach has been shown to hold a much higher likelihood that the bulk of the inheritance will be handled maturely by the child.
With all of this in view, most parents will naturally opt for a Family Trust or Living Trust as the best solution to this quandary.