Estate Planning Mistake: Not Planning for Minor Children/Beneficiaries

by | Feb 27, 2022

Are you planning ahead for your minor child?

One of the most important goals of estate planning is to ensure your children are cared for in the event of you and/or the other parent’s untimely death.

As a parent of a minor child, you need to have a proper Will in place that designates a guardian. (Make sure you ask the relative or friend before listing them as the designated guardian!) Beyond naming a guardian, spell out instructions for how you would like the children to be raised. Important things to consider in naming your guardian are: the guardian’s geographic location compared to where the children currently live, religion, lifestyle, and other family members in the home.

family with minor children estate planning


Conservatorship for a minor’s inheritance

Parents of minor children need to set up a trust to protect their children’s inheritance! No insurance company will pay $500,000 directly to a twelve-year-old child. In the event of a twelve-year-old being listed as the beneficiary of an account, a court proceeding called a conservatorship will be required for that child’s inheritance. The cost of obtaining such a conservatorship can also be substantial. Funds in a minor’s conservatorship are generally not allowed (by the court) to be invested in the open market – this can result in the value of the inheritance dwindling over time because of inflation.

Another huge drawback with a minor’s inheritance being in a conservatorship is that, generally, the money is required to be turned over to the minor once he or she reaches 18 or 21 years of age. Those ages are perhaps the worst ages to turn over a significant inheritance to a child or grandchild.

Trust to protect your minor’s inheritance

What is the good news?! An inheritance left in trust for a minor can specifically indicate who is going to manage the funds and make distributions for college and the like. It can also indicate the age (or spread out over multiple ages) at which the funds will be turned over to the minor beneficiary!

As long as the inheritance is held in trust with an independent trustee in charge, it can be protected from your child’s:

  • Bad spending habits
  • Future divorcing spouse
  • Creditors or lawsuits lodged against them

A continuing trust can also indicate who receives the inheritance in the event of your child’s death. And of course, with proper investment, the inheritance can grow to provide more financial support over time. These are all reasons to ensure you are planning ahead for your minor beneficiary.


Speak with your estate planning attorney about setting up a trust that provides guidance regarding a minor beneficiary’s inheritance. You can schedule your complimentary initial consultation with our experienced attorneys online, or call our office at 719-259-4971.