Inheritance for kids

Hi all

Not sure if this is the right section, but here goes ...

I have 2 young kids, aged 6 and 3. I am aware that each of them stands to inherit very substantial sums from their grandparents. I am worried about the detrimental impacts this may have if they are given this money at a young age (e.g. may squander it, use it as an excuse not to earn their own money, may be subject to access by others through divorce, etc). I fully plan to raise good, educated kids who know the value of a dollar, so hopefully I am worrying about nothing.

However, I do have the current opportunity to influence how this wealth is transferred to them. Does anyone have any experience or tips in this regard (e.g. trust, deferred entitlement, payments only upon them earning a set amount of their own money, etc)?

Cheers

 

If their GP's are still able, having the provision to establish one or more testementary trusts has major benefits for minors and beyond.

 

I have no experience/not advice.
I'd figure it would go into a trust, and that this trust would be managed by you.
If it was me I'd us those funds to invest and grow that wealth so one day when you shuffle off that the combined dollars could become perpetual and ratber than being "gifted" that it continues to grow and is dispersed like an allowance each week/month.
10K Inheritance Set and Forget
Or type inheritance into the search bar

 

I guess it could come down to what you consider 'very substantial sums' to be. I would suggest there would be a different way to handle this if it were hundreds of thousands of dollars, or maybe $10k or $20k.

 

I'm sure they will. Yours.

 

The former. Enough that I don't have to worry about them at all, even living in Sydney.

Thanks all.

If a testamentary trust, do ppl normally have this discretionary or fixed (perhaps with conditions)? I'm not sure the GPs would like me having too much say, particularly if it could mean a child misses out or gets less than another.

 

Don't have kids, but this is what I'm thinking for my niece and nephews - setup a trust fund that can only pay for three things:

1) Non-cosmetic medical needs
2) Their first degree and post grad (so they don't become life long students...I've seen this before)
3) A ton of overseas travel between a certain age range to broaden their horizons...say, maybe 5 to 10 trips in total including insurance costs and capped accommodation costs (after that, they pay for their own holidays)

Done. That should leave more than enough money in the kitty for generations to come.

My strategy is about supporting health and education, so they can have the opportunity to do the rest themselves.

 

I draft a lot of wills with testamentary trusts, and have never done a fixed testamentary trust. All have been testamentary discretionary trusts. If they are set up with one beneficiary then that child can demand title transfer when they reach 18, no matter what the wills says - such as held in trust until Johnny reaches the age of 25.

 

equal split into two separate testamentary trusts, one for each child, may solve this?

you want to research the benefits of a testamentary trust.

 

Thanks for the feedback all.