What if I Want to Leave Property to a Minor?
Many of our clients want to leave property to kids, grandkids, nieces, and nephews who are not yet 18 years old. The concern is that minors can’t own property – you can’t put a child on a deed to a house. This is no problem! All of our wills and trusts contain provisions for transfers to minors. Even if your original plan does not leave property to a minor, we keep these provisions in there just in case, for example, you leave property to your son, but your son predeceases you, so his inheritance now goes to his kids who are still minors.
If your plan does not contain these provisions, and money ends up going to a minor, then their parent or another adult will have to go through a long and expensive court process to be appointed as their conservator to have any access to or control over those funds.
Our language says that if, upon my death, property is going to transfer to a minor, I am designating a trusted adult to hold that property until that kid turns 18 – or any age I choose. The trustee can be the child’s parent, an accountant, a trusted friend, an older sibling, or anyone else you choose. Just because the money is in trust does not mean the child cannot benefit from it until they are an adult. The trustee will have the discretion to make distributions for the minor’s benefit. So, if the 16-year-old grandchild wants to get their first car, your trustee will have the ability to provide funds out of the trust. Then, when they reach the designated age, the trustee distributes the entire balance to the child.
Many clients choose 18 as the age of distribution. However, others think it is not a great idea to dump a load of cash onto an 18-year-old. Teenagers don’t tend to make the best decisions. Some clients choose to withhold the funds until the child is, say, 25 or 30. You can even choose to have scheduled distributions. For example, your grandchild may be able to get 25% of their inheritance at age 18 as they head off to college, another 25% when they turn 25, and the remainder when they turn 30. Your planning can be customized however you want!
With careful estate planning, we can ensure that a minor’s inheritance is safeguarded and used wisely in accordance with your wishes while eliminating any need for court involvement.
