Can You Leave Assets To A Beneficiary Who is A Minor?

Many of your beneficiaries may be legal adults as you draft your estate plan. This means you can directly leave assets to them as you see fit. They can take control of financial accounts or real estate, for example.

This becomes more complicated if you have a beneficiary who is a minor. In many cases, minors are prohibited from fully owning property while they are under 18 years old. You may want to include minors in your estate plan—such as your grandchildren—so how do you do it?

Utilizing a trust

Some people use simple tactics, like leaving money to a grandchild’s parents and instructing them to transfer the funds when the child comes of age. This can work, but it can be complicated. The parent would technically own the assets. What if they decide to spend those assets and have nothing left to give to the grandchild when they turn 18? This creates a level of uncertainty and complexity that isn’t necessary.

Instead, you may want to put the assets for your grandchild into a trust. The trust can then hold that money for them until they are the appropriate age, at which point they take ownership.

Additionally, a trust gives you a chance to determine how the money should be used. Maybe you want your grandchild to get a college education, but tuition costs continue to rise and could be exceptionally high by the time your grandchild heads to college. You could put money into a trust and specify that it should cover their college-related expenses until they graduate.

The correct legal steps

As you can see, planning in advance can help you accomplish a variety of goals with your estate plan. Just make sure you know the right legal steps to take to get everything set up correctly. Contact us online or call today for a free consultation with Pennington Law, PLLC.