How Do I Plan Baby’s Inheritance?

My husband and I want to make sure that our baby has money in case we pass away. What’s the best way to do this?
profile picture of Hasti Daneshvar
ByHasti Daneshvar
Updated
Mar 2017
Hero Image
Photo: Shutterstock

Without a will, your kids will be entitled to their whole inheritance (or at least what’s left once it goes through probate) when they become a legal adult — in most states, that’s at age 18. If you’re concerned that your children may blow all the money at once, or what attorneys call “squandering of assets,” then you can create a testamentary trust or a  revocable living trust to stop the distribution of your assets until your children are more mature. You can also include a spendthrift provision, which will prevent your child from pledging their inheritance as collateral for a loan. Another great way to save money for your kids is to create an educational trust, or a 529 plan, which is a  tax-advantaged savings plan designed to encourage saving for future college costs.

Plus, more from The Bump:

Related Video

26 or 36: When Can You Really Afford a Baby?

Anisa Arsenault
Associate Editor

How to Prepare Your Finances for Baby's Arrival

Lisa Milbrand
Contributing Writer
Advertisement