How Can A Person Leave Property To Minor Children?
Generally, the law requires that adults manage children’s inheritances until the children turn 18. If a testator wants to leave property to children, it makes sense to name an adult to manage that property. Otherwise, a court will name someone to safeguard the property, a procedure that may delay the speedy transfer of assets. There are several ways a will can provide for property management while heirs are underage. These include:
- Trusts: A will can establish a trust to handle property left to children. A trustee is named to manage the property for the children’s benefit and distribute trust property according to the testator’s instructions. A will can either set up an individual trust for each individual child or a pot trust that covers multiple children. The trustee usually follows instructions to spend trust funds to meet children’s needs until they come of age. When the child or youngest child covered by the trust reaches 18 or another given age, the trust funds usually are distributed among the beneficiaries and the trust ends.
- Uniform Transfers to Minors Act (UTMA) custodians: The UTMA is a law that exists in almost every state and gives a testator the ability to choose a custodian to manage property left to a child. If, at the testator’s death, the child is under 18, 21 or 25 (depending on the specific version of the state UTMA law), the custodian will manage the property until the child reaches the statutory age. At that age, the child receives whatever is left of the property outright. Unlike a trust, the testator cannot change the age at which the child receives this distribution.
- Property guardians: A will can name a property guardian for a child. At the testator’s death, if the child is still underage, the probate court will appoint the chosen guardian to manage property for the child. This option is available when a trust or UTMA custodian is not specified.
The option chosen for gifts to children will depend on the testator’s goals, the size of the intended gift and the age and character of the children.
Have Additional Estate Planning Questions?
I am Charles M. Hall, an attorney with more than 45 years of experience in estate law. If you have additional questions about estate planning or would like help in creating a customized plan, call my Atlanta office at 404-865-1966. You can also fill out my online contact form.