Experts are anticipating one of the largest transfers of wealth that have ever taken place in the country. Over the course of the next 25 years, there may be $68 trillion in wealth passing from one generation to the next. However, simply transferring wealth upon one’s death is not always as straightforward as it may seem, especially when it comes to minor heirs. Remaining mindful of this during estate planning can be key to avoiding unintended consequences.
For example, many people in Georgia use wills to bequeath inheritances to heirs. While this is common practice, it may be ineffective if an heir is a minor. It is not uncommon for a minor to have no legal authority over his or her inheritance. In this situation, a court-appointed guardianship would manage the inheritance on his or her behalf.
In this situation, it may be more prudent to set up a trust. Rather than go directly to the heir, the inheritance would be placed in the trust. A named trustee — usually a trusted friend or relative — would then manage the asset on behalf of the heir and according to any included instructions. This would also allow the inheritance to bypass the lengthy probate process.
Trusts are also useful in other areas of estate planning, not just when dealing with minor heirs. They are often used by those who hope to exercise greater control over how an inheritance is handled, or when hoping to bypass probate. Working closely with a knowledgeable Georgia attorney may prove helpful for those who are unsure of how to establish their own trusts.