Illinois Children's Trusts
Children under the age of 18 cannot directly inherit more than a small amount of money. If you make no provisions in your will, a court will appoint a property guardian to manage your child’s assets until he reaches 18.
That property guardian may be a stranger who will add another layer of bureaucracy to the situation. When your child needs money, formal requests will need to be made through the court system.
One solution is to set-up a custodial account for your child. You are allowed to choose the custodian, and the custodian makes decisions regarding how the money is spent. Once your child turns 18, the money is your child’s to spend as he pleases.
As Stacy L. Bradford points out in her Wall Street Journal piece titled, “Deciding if Your Kid is Trust-Worthy”, a better alternative may be to set up a trust. A trust allows more control over how money is spent once the parents are gone. The parents can specify how the trust money is to be spent, for example on college tuition, and a trust can delay the age at which the child has access to the money, for example the child gets half at age 30 and the other half at 35.
The trustee makes all of the decisions, so it’s important to pick a person who is trustworthy, financially astute and diligent.
Once you have reached the point where you have determined all of these things, consult a lawyer who practices in the area of estate planning.