Parents want what is best for their children, but at the same time, they expect their adult children to clean up their own financial messes. When parents die and leave their estates to their children, however, all too often the assets go to settle their various debts. Instead of a nest egg that helps children stabilize their lives for the long term, the assets evaporate and end up in creditors' pockets the parents never planned for. With family estate planning, parents have a toolbox to help ensure their children's inheritance goes to the children.

Start With a Trust

Starting a trust is a good idea for a number of reasons. For example, you can skip probate and minimize estate taxes. Another benefit is that you can partially shield your assets from the beneficiary's creditors. Some states now allow creditor protection, limiting a creditor's access to trust assets. In addition, a trust may limit your children's ability to access all of their inheritance at once, which can be helpful if you are concerned that they may use it unwisely.

Create a Buy-Sell Agreement

If you run a successful business, then you probably want to pass that business on to your children when you die, but again, creditors may come after the business's assets. You may even begin that process before your death. However, a straightforward transfer may not protect the business from creditors or challenges.

A buy-sell agreement usually includes language that restricts business transfer after a death. You can structure the agreement so that it requires other owners or the entity to buy out the business, thus providing protection from outside claims.

Open an IRA

When you begin an individual retirement account, you can name your children as beneficiaries. Money can be disbursed over a period of time, sometimes even a lifetime, resulting in lower taxes. If you are concerned that your child may withdraw all of the money, despite the penalties, you may be able to place the assets of the IRA in a trust that requires the money be withdrawn gradually.

Advocate for a Marital Agreement

If you are concerned that your child may divorce, and the ex-spouse may be entitled to a portion of your estate, you can make a case for executing a marital agreement that clearly states each spouse's rights to property should they separate or should one of them die. Pre- and Post-marital agreements are particularly useful when the child has been married more than once or has children from different relationships.

The fact is, a little planning can save a lot of problems, and the above solutions are just some of the ways you can set your mind at ease. For more information on protecting your children's inheritance, go to http://www.flwillstrusts.com.