Main Menu McMahon Law Firm, Attorneys and Counselors at Law

Toll Free


Free Initial Consultation
"Attorney Advertising"

How to leave assets to minor or adult children

New York parents may have a desire to leave money or other assets to their children either while still alive or after their deaths. However, there may be a right way to do so. For instance, it may not be a good idea to name a minor child as the beneficiary to an asset. Instead, it may be better for a parent to create a trust that will inherit financial assets when he or she dies.

This may work out best because a minor child cannot legally own financial assets on his or her own. If a child does come into possession of such an asset, a hearing is held to determine which adult will manage the money until the child turns 18. However, the beneficiary may not be mature enough to handle a large sum of money at that age.

Creating a trust may provide some boundaries to increase the odds that the money is used in a responsible manner. A parent may also want to hold off on giving a child a highly appreciated asset until he or she passes on. This is because the child gets a step-up in basis at that point. Ideally, only assets that have minimally appreciated should be given to children while a parent is still alive to minimize future capital gains taxes.

Proper estate planning may reduce the likelihood of family disputes or other issues when a parent passes away. Creating a trust may allow parents to exercise control over how assets are used while still giving a child assets that he or she may need to live a comfortable life. An attorney can often be of assistance in this regard.

No Comments

Leave a comment
Comment Information