Minors and Inheritances

CLIENT QUESTION:

My husband and I have CDs and bank accounts in which our minor grandchildren are the beneficiaries. Do we need to set up a trust to ensure that if we pass before they reach the age of 18, these assets go straight to them?

We do not want their parents to be the trustees, so we don’t know how we would even accomplish this. Thank you!

MY RESPONSE:

Wow, there is a lot to unpack here, but I understand your concerns.

You don’t need a trust (on these facts) to ensure your grandchildren get the money. You already accomplished that goal. Right now, they are the beneficiaries of the bank accounts and will inherit those accounts without a will, or a trust. They will get the accounts without probate automatically because they are the beneficiaries. However, if they are under 18, they will be set up as Custodial Accounts, under the control of their parents. Yikes! Not a good idea.

A better idea would be to have them inherit the money in a trust, with a trustee other than their parents. This can be accomplished in your will or by you setting up a revocable trust.

Same money. Same idea. Better plan!

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