Minors can inherit money, but that doesn't mean they can get their hands on it. If you die before your kids are adults, either you appoint someone to handle their inheritance or the probate court will do it for you. Appointing someone you trust to look out for your children is part of good estate planning.
Children don't inherit automatically: most states lets you leave your property to someone other than your kids if you wish. If you do want your child or children to inherit, a will is the best way to do it. Otherwise, the probate judge will divide up your assets according to state law, which may not fit your wishes. It's particularly important to have a will if you're not married. Some states won't give children born to unmarried parents any share of the father's estate unless he wrote a will or signs a paternity statement.
A trust is one way to manage your child's inheritance until he turns 18. You can create a living trust now and place your assets into it, or use your will to set up a trust. You also have to name someone you rely on to serve as trustee, with the responsibility for paying bills and providing your child with money when he needs it. If you have more than one child, you can set up a separate trust for each, or a "pot trust" they share.
Rather than create a trust, you can simply appoint someone to manage property for your children. You can name a property guardian in your will or use the Uniform Transfers to Minors Act -- the law in almost every state -- to appoint a custodian for their property. If you're married, your spouse usually becomes guardian after your death -- or you can simply leave everything to him and trust that he'll pass the assets along to your children.
Being a custodian, guardian or trustee is a demanding job so never spring it on anyone. Talk to the person you want about what you expect from them and confirm they're willing to accept the responsibility. Pick a backup as well, so that if your chosen trustee dies or otherwise can't follow through, you still have someone on deck. You have the option to pick multiple people -- one guardian to serve as caregiver for your kids, and someone else to manage the money, for instance.
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