As parents, we naturally spend a lot of time thinking about our children’s future — their health, education, and opportunities. But one area many families overlook is what happens if children are left without parents before they’re adults. Who would raise them? How would their inheritance be managed?
In Illinois, estate planning isn’t just about passing on property. It’s also about protecting your children in the event of the unexpected. This guide walks Illinois parents through the key considerations when planning for minor children, from financial management to naming a guardian.
The information in this post is educational in nature, and is not to be relied upon as legal advice. Engage an estate planning attorney for help with your particular circumstances.
Why Planning Ahead Matters
Under Illinois law, children under 18 cannot legally control money or property. Even at 18, many parents feel that’s too young for a child to handle a significant inheritance responsibly. If you don’t make a plan, the probate court will step in — and that can mean added cost, delay, and decisions made by a judge who doesn’t know your family.
By taking time now to write clear instructions into your will or trust, you ensure:
- Your children are cared for by the people you trust most.
- Their inheritance is used for their benefit, not wasted or mismanaged.
- Court involvement is minimized, saving your family time and stress.
Managing Inheritances for Minors in Illinois
There are several tools under Illinois law for handling money or property left to children. Which one is right for you depends on your goals and the size of your estate.
1. Custodianship Under the Illinois Uniform Transfers to Minors Act (UTMA)
One of the simplest options is naming a custodian under the Illinois UTMA. This allows your executor to transfer your child’s inheritance into a custodianship account.
- How it works: The custodian manages the funds until your child reaches 21. The money can be spent on education, health care, or general support. At 21, whatever remains goes directly to your child.
- When it makes sense: This is a good option for smaller inheritances or when you trust the chosen custodian to make sound decisions.
- Downside: At 21, your child gets full control — ready or not. For larger inheritances, some parents prefer a longer timeline.
Plain English translation of typical will language:
“If a child under 21 inherits from me, the executor can put that money in the hands of a responsible adult custodian, who will use it for the child’s needs. When the child turns 21, any remaining money will go to them directly.”
2. Creating a Children’s Trust
For parents who want more flexibility, a children’s trust is often the better choice. A trust lets you set the rules instead of relying on the default law.
- You choose the trustee. This could be a family member, close friend, or professional trustee.
- You control the terms. You can decide how funds are used (school tuition, medical care, first home purchase, etc.) and when they’re released.
- You set the timeline. Instead of everything being turned over at 18 or 21, you can stagger distributions. For example: one-third at age 25, another at 30, and the balance at 35.
- You can add conditions. Some parents tie distributions to milestones like completing college or maintaining employment.
Example: A parent leaves $200,000 in trust for her two children. The trustee can use the funds for their health, education, and general well-being while they’re growing up. Once each child turns 25, they receive one-third outright; another portion at 30; and the rest at 35. This way, they have support in early adulthood but don’t receive a lump sum at an age when it might be wasted.
Naming a Guardian in Illinois
Money isn’t everything — someone also has to raise your children if you and the other parent can’t. In Illinois, you can name a guardian of the person (who takes care of the child) and a guardian of the estate (who manages the child’s money) in your will.
- If you don’t name a guardian: The probate court will appoint one. Judges do their best, but their decision may not reflect your wishes.
- How to choose: Think about who shares your parenting values, who your child feels comfortable with, and who is financially and emotionally able to step in. Always talk with the person before naming them.
- Naming a backup: It’s wise to list an alternate guardian in case your first choice cannot serve.
Plain English translation of typical will language:
“If my spouse is not living, I want my sister, Ann, to raise my children. If she can’t do it, then I want my brother-in-law, Joe, to take over. I don’t want them to have to buy an expensive insurance bond to serve as guardian.”
FAQs for Illinois Parents
Q: What happens if I don’t plan at all?
A: The probate court will decide both who raises your children and how their inheritance is managed. The money may be tied up until your child turns 18, at which point it’s handed over in full — regardless of their maturity.
Q: Can I name different people to raise my kids and manage their money?
A: Yes. Sometimes the person who’s best to care for your children isn’t the best with finances. Illinois law allows you to separate those roles.
Q: What if I want to provide for stepchildren or nieces/nephews?
A: Unless they’re legally adopted, they won’t inherit automatically under Illinois law. You need to include them specifically in your will or trust.
Q: What about life insurance?
A: Life insurance proceeds can be directed into a trust or custodianship, just like other estate assets. This is an important step if you expect insurance to be a major source of support for your children.
Taking the Next Step
Every family is different. Some parents are comfortable with a simple custodianship that hands money over at 21. Others want the control of a trust that stretches distributions into a child’s thirties. Either way, the most important thing is to put your wishes in writing.
In Illinois, a carefully drafted will or trust not only protects your children’s inheritance but also ensures they are cared for by the people you trust most. It’s one of the most meaningful gifts you can leave them.
If you have minor children, the best time to plan for their future is now. Palley Law helps Illinois families create wills and trusts that protect their children and provide peace of mind. Contact the office today to schedule a consultation and take the first step in safeguarding your family’s future.