Skip to content
A group of people posing for a photo with a deer statue, inheritance.

Are Your Heirs Adulting?

adulting [ad-ult-ing] noun.  The practice of behaving in a way characteristic of a responsible adult, especially the accomplishment of mundane but necessary tasks.

 I borrowed this idea, including the title and definition, from my friend Cathy Perry, who is a Director of Trust and Estate Services at BMO Private Bank.  In that role, Cathy discusses with her clients at what age children or grandchildren should inherit money.   As an estate planning attorney, I also discuss this issue with my clients.

When I discuss this subject with my sons – at what age do they think they should control their inheritance (assuming there is one) – early 20s is often the answer.  Although my youngest, who is great at making us all laugh, jokingly wants to know before he answers: Will he inherit enough money to buy a Lamborghini, and if so, could he choose a car over a college education? Questions to which I quickly answer – no and no.

Which leads back to the original question, at what age should children or grandchildren inherit?  As Cathy points out, “there is no right or wrong answer to that question.   The ability to manage money can vary among children within the same family or change over time as children age.  A plan that you set up when your heirs are young should be revisited as they age and you learn more about their characters and habits and money skills.”

When I’m creating estate plans for families, we talk about this question and also review a number of potential options for allowing heirs to have access to money for their needs but also limit spending. Ideally, an inheritance is not wasted and can continue to provide for an heir’s needs throughout their life and possibly for generations to come.

A couple of the many options to consider are outlined below:

A Sprinkling or Pooled Trust

We typically create a sprinkling or pooled trust for younger children in the event their parents die before children have finished college or other post-high-school education.  This allows the trustee of the trust to sprinkle funds among all the children.  Practically, this means treating all of the children much like a parent would – using funds for each child’s needs without equalizing what is spent.  For example, if one child has medical needs and another does not, or one child goes to an in-state college and another goes to a more expensive out-of-state college, the funds are taken out of the pooled trust, but do not need to be equally distributed amongst each child.  Once all of the children have reached the client-directed age or achievement milestone, the funds are then disbursed in equal shares outright, or continue to be held in separate trusts, for each of the children.

Separate General Needs Trust

We also create general needs trusts for children or grandchildren on the grantor’s (parent or grandparent who created the original trust) death.  This trust allows the trustee to provide for the needs of the loved one – with parameters on what those needs should include, as set by the grantor.  The trustee can be a trusted third-party, such as an older, trusted loved one or a corporate trustee.  The child or grandchild who is the beneficiary of the trust can also, on obtaining a certain age, be named as a sole or co-trustee of the trust.

General Needs Trusts provide a wide variety of flexibility in allowing loved ones access to the assets in a trust.  Some examples include allowing a beneficiary to receive a certain percentage of the assets outright when they reach certain ages, allowing the beneficiary to serve as co- or sole-trustee of the trust and assist in making decisions about needs-based distributions, or giving the beneficiary a certain percentage of the principal of the trust outright every year.

The key takeaway is simply that all of our children and grandchildren are different and may mature at different ages and in different ways.  Estate planning provides many, many opportunities to flexibly provide for our heirs needs as they mature.

In the preparation and review of all estate plans this question is always an important one to consider: Are your heirs adulting?

Thanks again to Cathy Perry, Director of Trust and Estate Services at BMO Private Bank for this idea and some of the content.


Contact The Estate Planner LLC in our St. Louis office at 314-303-3218 for assistance preparing your estate plan.

** The choice of a lawyer is an important decision and should not be based solely on advertisements.  This blog post is for informational purposes only and is not legal advice.

Written on August 21, 2022 by Stephanie Copp Martinez, JD

Back To Top