We speak with clients about this very topic at least once a week! It's tough to imaging situations where you pass away before your children reach adulthood, but it is one of the many scenarios we plan for as estate law attorneys. Every family is different, and every set of children are different.
When deciding the appropriate age for your minor children to receive payouts, it's important to balance their ability to manage money with their maturity and financial literacy. Here are a few examples of ages when you might consider allowing payouts:
18 years old: This is typically the age of majority in many countries, meaning they are legally considered adults and can make financial decisions on their own. However, many people feel that 18-year-olds might not yet have the financial wisdom to manage large sums responsibly.
21 years old: In some cases, 21 is a more mature age, as many people have completed higher education or gained work experience by this point. It’s often seen as a more appropriate age for handling money, especially if the payout is significant.
25 years old: Some people choose to delay payouts until 25, which is often considered an age where young adults are more settled in their lives, have gained more life experience, and may be more responsible with money. Additionally, by this age, they may be more established in their careers or personal finances.
30 years old: At 30, many people have more stability in their personal and professional lives. They might be more established in their careers, have some experience managing finances, and are often more focused on long-term financial goals like homeownership or retirement savings. This age allows for a more mature and considered approach to money management.
40 years old: By 40, your children are likely to have reached a higher level of financial maturity and may have already encountered the complexities of managing money over time, such as dealing with mortgages, saving for retirement, or raising their own families. This age can be a good choice for a payout if you want to ensure they are fully settled and have a strong sense of responsibility.
Gradual payouts: Another option is to provide the inheritance in stages.
For example:
Age tied to milestones: You can also make the payouts conditional on certain milestones, such as completing higher education, getting married, or establishing a career. This gives the child a clear sense of purpose or incentive for financial responsibility.
Ultimately, the age depends on your belief about when your children will be ready to handle money responsibly. When you work with an estate law attorney like us to set up trusts, you're ensuring that the money is distributed and used wisely.
Ready to put a plan in place? Give us a call.
