Estate Lawyer: Underage Beneficiaries
When you create a will with an estate lawyer, one of the most important steps is choosing your beneficiaries. These are the people you have selected to receive your estate’s assets. It is extremely common for people to leave a gift or even the majority of their estate to their children. In some cases, tragedy occurs, and an estate is left to a child who is not yet 18 years old. In these cases, there are some special circumstances that impact how that estate is handled. Today, the estate lawyers at Davidson Law Group will discuss exactly what happens when a beneficiary receives assets before they become adults.
What if a Minor is a Beneficiary?
One example may be where parents, upon their deaths, pass their entire state to their child or children. If these children are still minors, the named executor must act as a trustee for the estate on behalf of the children. They administer decisions and control any assets for the benefit of the beneficiary.
Most wills allow for some regular payments out of the trust fund for the child’s benefit. Some reasons include school funds, health care costs, or just living expenses. It is not until the child becomes an adult that the trust transfers from the control of the executor into the beneficiary’s control.
If you are worried that your child may not be ready to be responsible for their own finances at the age of 18, you can place stipulations on how the trust is dispersed. For instance, regulation can be placed on a portion of the estate to the only payout into your child’s control once they own a home. This way you can ensure that your child does not waste their trust in your absence.
Uniform Transfers to Minors Act
In Texas, leaving a gift to a child without creating a trust can be done thanks to the Uniform Transfers to Minors Act (UMTA). In this case, a custodian will control the funds for the minor until a certain age as specified by the will created by you and your estate lawyer. Many estate lawyers recommend ending the trust at 18. In Texas, trusts are required to end by the time the beneficiary turns 21. Until that period, the custodian in charge of the trust has the right to collect, hold, manage, invest, and reinvest the minor’s property, all without a court’s approval. As such, it is important to choose an executor who you trust and nominate them with the help of your estate lawyer.
Related Post: Advice for Dividing Estates Equally Among Beneficiaries
Need an Estate Lawyer for Your Estate Planning?
Contact the estate attorneys at Davidson Law Group today. Our team is dedicated to ensuring that your last will and testament is carried out exactly as you see fit. Contact us in Fort Worth, Allen, or Tyler to learn more.