Many young adults at age 18 and even older, lack the maturity and experience to manage even a modest sum of money. Some 18 year olds would head out to the nearest car dealer rather than plan for the future with an IRA.
There are definite benefits to your children if you leave them their inheritance in the form of a trust so that instead of assets going outright to them at a certain age, the money goes into separate trusts for each children. You can contact living trust in California, living trust lawyer in orange county, CA for the best legal guidance
Some of the benefits are the following:
1. Spreading out distributions over time intervals. Perhaps you want to leave 1/3 of each child's portion of the estate to them at age 21, another 1/3 at age 30, and the balance at age 40.
2. Keeping assets out of the hands of your child's creditors, a bankruptcy, or a judgment in a lawsuit. If your child does not receive all of his or her inheritance at once, there is less for creditors to reach in the event that your child has financial or legal problems.
3. Provisions about substance abuse. In a trust, you can add provisions that give your trustee the discretion to ask a beneficiary to submit to a mandatory drug test if the trustee feels that the beneficiary is using illegal substances.
4. Provisions for distributions if your child predeceases you. If a child of yours passes away before receiving all of his or her inheritance, do you want your grandchildren to receive their parent's share or do you want your other surviving children to take that share?
5. Special Needs Trusts for disabled beneficiaries. One of the biggest concerns for the parents of a disabled child is how to leave an inheritance for that child and not impact their ability to receive government benefits.