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Is Your Child Terrible With Money? Steps You Can Take To Protect Their Inheritance

By Lane V. Erickson, Idaho Estate Planning Attorney

We all worry about our kids and being a parent is not a part-time job. Additionally, being a parent doesn’t come to an end when your children become adults. In fact, you worry about them as much or maybe even more when they become adults than you did when they were children.

This is especially true when you have a child who is a financial disaster. Sometimes, despite all the nurturing, love, guidance, and help that you can give to a child, they are still terrible with money. Whether it’s a simple financial problem such as being bad at budgeting, or something much worse like abusing credit cards and other easily accessible debt you may have to come to grips with the fact that your adult child is terrible with money.

It’s not a good thing if your child is terrible with money, but it is a good thing if you are aware of it. Knowing the problem is the first step to finding a solution for that problem. This has never been truer than when you are considering your own estate planning, and how you can leave an inheritance to a child who is terrible with money.

The premier Idaho estate planning team of lawyers at the Racine Olson law firm have assisted clients with their customized estate planning for more than 70 years. We have the skill, experience, and know I’d necessary to help you make decisions about your own estate planning that will work best for you individually and for your family members and loved ones. Our goal is to create a plan that provides as much protection as possible for you while you are alive and allow you to find a way to properly give away your estate to those you love, after you pass away.

If you do have a child that is terrible with money, we encourage you to contact us for a free 30-minute consultation where we can discuss your concerns. We also provide a free Estate Planning Questionnaire you can download that allows you to list this information and guide you through the process of making decisions about what will work best for yourself, and your family members, including a spendthrift child.

There are some additional things that you can do when it comes to your estate planning and a spendthrift child. This article is just a few of those ideas.

Give them Nothing

The first thing that you could do is give them nothing. This simply means that you disinherit this child from your estate plan.

Under Idaho law you are legally able to disinherit anyone you choose other than a spouse when dealing with community property. This means if you are concerned about your child spending their inheritance wastefully, you can choose to not give them an inheritance in the first place. This is an option chosen by some parents who believe that leaving a sizable inheritance to a spendthrift child will cause greater heartache and problems in that child’s life than being disinherited would. It is not an ideal option but it is an option.

Give them a Little

Another option is to give them a little bit of inheritance without giving them too much. Some parents choose to do this.

For example, if you have a sizeable estate, you may choose to leave a smaller amount of money, property, or other assets to this child than you leave to others. Alternatively, if you only have one child you can leave the remainder to charities or other institutions or individuals of your choosing. There is no law that requires that you leave any inheritance to any child.

Use a Trust

The final option, and perhaps the best option, is to create a trust for your spendthrift child. If you create a trust for your child, and you place their inheritance into the trust, you can name any person to act as the trustee that you want. You can also provide the trustee with specific guidelines and instructions on how the trust will be dispersed for your child. You can choose to have an annual amount distributed to the child, or you can choose to have the trustee pay only for necessities of that child.

Alternatively, you can provide some incentives as well. You can leave instructions that the money in the trust will be used for paying for a college education or to help your child begin a business. However, you can limit the distributions to be made directly from the trustee to the third party to benefit your child without ever giving any of the money, property, or assets directly to the child.

You also have the option of staggering when these distributions will be made. If your child is young, you can stagger the distributions to be at specific ages such as 25, 30, 35 and so forth. This allows your child to mature and hopefully gain a better education and more experience in handling finances prior to receiving their entire inheritance.

Alternatively, you can also require that your child present to the trustee that they have completed their college education and earned a college degree or a training certificate showing that they completed a program at an institution of higher learning. Similarly, you can leave any incentive by his requirement that you choose as part of the trust before any or continuous distributions are made from the trust to your child.

In the end, there are several ways that you can help your child without leaving any or all of an inheritance directly to your child. We have helped numerous parents craft a customized estate plan that meets their specific requirements and needs. We are confident that we can help you too!

Enlist an Idaho Estate Planning Attorney To Help You

Our team of Idaho lawyers can help you with any of your estate planning or probate needs. Whether you are seeking to create or review an estate plan for yourself or would like to help a loved one, we are available to discuss your options and answer your questions at an initial free 30-minute consultation. Call us toll free at 877-232-6101 or 208-232-6101 for a free consultation. You can also email us directly at or stop by our office at 201 East Center Street, Pocatello, Idaho 83201. We will answer your questions and help you solve your Idaho Estate Planning problems.

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