As an estate planning attorney I often meet with clients to discuss the creation of their personalized the state plans. During these conversations inevitably my clients bring up their children, and often the circumstances of each child. I have found that during these discussions my clients are often concerned about making gifts outrightly to their children depending on their children’s personalities end or circumstances. Based upon these experiences, here are 3 things to consider when making gifts to your children.
1. YOUR CHILD’S AGE
When considering making a gift directly to a child the first thing that you should consider is their age. This is true because if your children are minors, which in Idaho means under the age of 18, then you cannot make a gift directly to them. Rather, the gift will have to be made to the guardian of that child. So if both you and your spouse pass away, and you leave your estate to your minor children, this means that another individual will actually have the ability to control and maintain your estate. They are supposed to do this on behalf of your child, but they will have the ultimate control about distributions, when monies are spent, and how they are spent. This is true and less you use your estate planning to control when property will be used for your child and how it will be delivered to them.
2. YOUR CHILD’S CAPACITY
The next thing that you should consider is the capacity of your child. This is a legal word that simply means whether your child has the ability to care for themselves and their property. Individuals with disabilities, or with other special needs, they never have the capacity to handle or deal with property that is given to them through your state. As a parent, you should always consider the circumstances of your child’s mind, and their ability to care for themselves as you consider making a gift to your child through your estate planning.
If you have a child that has special needs, you can use your estate planning to set up a Special Needs Trust, or a testamentary trust that will provide for that child and not jeopardize their ability to continue to receive government benefits.
3. YOUR CHILD’S CIRCUMSTANCES IN LIFE
The final thing that you should consider when giving a gift through your estate planning to your children is the circumstances of your child’s life. Consider for a moment whether you have a child who is bad with money. Alternatively you may have a child who has a drug or alcohol abuse problem. Similarly, you may have a child who has gone through or is going through a bankruptcy. In any of these circumstances you may not want to give money directly to your child. By understanding the circumstances of your children’s lives you have the ability through your estate planning to create a customized gift that can be provided to your child without giving money directly to them.
If you have questions about how to gift property to your children, or whether property should be gifted directly to your child, we can help. Call us toll free at 877-232-6101 or 208-232-6101 for a consultation with Lane Erickson and the Racine Olson team of Estate Planning attorneys in Idaho. You can also email Lane Erickson directly at lve@racinelaw.net. We will answer your Idaho Estate Planning questions and will help you solve your Idaho Estate Planning problems.