7 Biggest Mistakes Parents Make When Planning For Their Children’s Futures

1. Assuming Assets Only Transfer To Children Upon Parent’s Death In California, a scheme of intestate succession determines where your assets go after your death if you do not leave a will. While the intestacy scheme dictates that a person’s living children are generally first in line to receive their assets, this can be disrupted if creditors or other heirs want to take a piece for themselves. Without a properly drafted trust in place, your children could be left to fend off unwanted predators of your estate. 2. Choosing The Wrong Trustee Parents can also inadvertently make the mistake of entrusting the wrong person to handle the assets for their children. Choosing the wrong Trustee can lead to various complicated issues with costly consequences, such as misappropriation of funds. The most disheartening part is that you may not be there to correct the mistakes. Therefore, you should take the time to determine who you want to manage the trust for your children. Before choosing someone to be your Trustee, you should consider factors such as their health, age, location, trustworthiness, and judgment skills. 3. Not Focusing On Trust Objectives When you have clear objectives for your trust, you’ll have an easy time deciding which type of trust to create. For example, if your primary goal is to minimize tax liability on your assets after your death, creative trust drafting can affect this goal. This is why coming to a trust planning meeting with your attorney requires some forethought. You must have your goals in order before you proceed with creating a trust. 4. Not Considering A Child’s Maturity Level Parents also need to avoid another common mistake: disregarding their child’s maturity level when creating a trust. You must objectively consider a minor’s maturity level when deciding how much of the funds they can access and when they can access them. You may want to consider factors such as your child’s age and how they demonstrate responsibility on a day-to-day basis. We do not generally advise parents to leave a large sum of money at a younger beneficiary’s disposal to spend as they wish. To avoid situations where children are left with money they are not prepared to handle, your trust should include guidelines that spell out how and when the Trustee should use the assets and when the beneficiary will have access. 5. Naming Children As The Beneficiaries Another big mistake parents make when establishing a trust is to name their children as the primary beneficiaries of any insurance policies and retirement accounts, rather than naming their trust. Naming the trust as the primary beneficiary of these types of assets ensures the funds from these assets are distributed according to the terms of your trust. 6. Not Reviewing The Trust Regularly To maintain oversight, it is important to review the terms of your trust annually, or at least upon the occurrence of any major life event (someone in your family passes away, gets married, goes to college, etc.). You want your estate plan to be up to date as things change in your life. Regularly checking your trust allows you to reevaluate certain decisions you made previously such as: 7. The person you have chosen to be your Trustee. Are they still fit to serve as Trustee, or have any concerns arisen that would compromise their capacity to serve as Trustee? Your list of beneficiaries. You may be considering adding or removing a beneficiary. Establishing a trust for your children can ensure that the assets you leave behind will benefit them as you wish. However, your good intentions could be compromised by any of the common mistakes we discussed. An experienced attorney from Weiner Law can help you avoid these missteps and ensure you create a trust that meets your specific needs. If you want to create a trust for your child but do not know where to start, Weiner Law can help. We offer a wide range of estate planning services to meet your specific needs. We will walk you through you every step of establishing a trust fund for your children. Contact us today at 858-333-8844 for a complimentary, no-obligation evaluation. Weiner Law 12707 High Bluff Drive Ste. 125 San Diego, CA 92130 (858) 333-8844 https://weinerlegacylaw.com/