The simplest estate plans often involve testators identifying their beneficiaries and leaving assets for those people in a will. In some cases, they may not even earmark specific assets for individual beneficiaries.
Other circumstances require more planning and consideration. For example, sometimes testators need to establish trusts for the protection of their loved ones. Not everyone can inherit directly from an estate through a will. Some people require the separation provided by a trust instead.
What types of beneficiaries cannot inherit property directly from an estate in most cases?
1. Minor children
People with children or grandchildren often intend to leave assets for their progeny. However, while those beneficiaries are still minors, they don’t technically have control over their inheritance.
Instead, their parents or guardians control their assets. A trust may be important in cases where testators worry about parents or guardians squandering resources before a beneficiary becomes a legal adult.
2. People with special needs
Children are not the only people who may lack the legal authority to manage an inheritance. Individuals with special needs, especially those dealing with permanently incapacitating conditions, may also be ineligible for a large inheritance.
What they receive from an estate may be subject to the control of their guardian or caregiver. A large inheritance could put them at risk of financial abuse.
Family members trying to leave resources for individuals with special needs often create special needs trusts to preserve those resources. Special needs trusts are also beneficial because they help beneficiaries remain eligible for state benefits that may increase their sense of independence or their overall standard of living.
3. Pets and other companion animals
When people talk about pets, they often refer to dogs, cats, birds and other household animals. Companion animal is a broader term that may include livestock, such as horses.
Regardless of what people call the animals that they want to provide for in their estate plans, those animals do not have the legal standing to directly inherit from their estate. People frequently choose to create pet trusts as a means of safeguarding resources for animals and ensuring that they have appropriate support from caregivers.
Testators hoping to provide lasting support for loved ones may need help achieving their testamentary goals. Discussing personal wishes and family circumstances can help people establish realistic and effective estate plans.