Trend: Inheritances Being Distributed to Heirs at Older Ages
July 4, 2013
One of the most commonly discussed concerns that people across California have when it comes to leaving an inheritance to children is the age at which the child should actually receive the money. If a child is too young or immature when they inherit a large sum of money, that money may not be utilized in the manner in which it was intended.
People who leave inheritances generally hope that the money will be used by heirs responsibly and for reasons that enhance their lives, not just wasted on trivial things. One way that people who are developing an estate plan can ensure that inheritances are not mismanaged is to delay the age at which an heir receives the money. This practice is quickly becoming a popular trend in estate plans across California.
Today’s younger generations are very different from their parents. Many more of them live at home longer and are delaying certain life events such as marriage, careers and kids. This trend is making some baby boomer parents hesitant to leave their kids a significant sum of money in their wills that can be accessed right away and spent impulsively.
Instead, parents are requiring their heirs to wait a longer period of time to collect an inheritance. Rather than collecting it right away, some kids are only given access to funds when they are much more mature. For example, rather than an 18-year-old child collecting an inheritance, that person may have to wait until he or she is more mature, established and perhaps raising a family.
Some sources indicate that the age at which kids are collecting inheritances has increased from about 21 or 25 to 30 or 35. With many life events happening later in the lives of younger generations, adding a large sum of money to the mix may only complicate matters when kids are not as mature.
Every family is different, however, and it is important to remember that what works for one family may not work for another. Determining how best to distribute money and assets in an estate plan can be a very overwhelming and complex process. But by working with an attorney who understands these matters, people can get peace of mind knowing that their intents and wishes are clearly expressed.
Source: Financial Post, “More heirs wait as wills dole out estate money slowly,” Chris Taylor, June 13, 2013