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In A Will, How Do You Handle Leaving Your Stuff to Minor Children?

There are two ways to appoint an adult to manage property that you leave to others in your will: the UTMA or a child’s trust.

For most people, the preferred method is the Uniform Transfers to Minors Act (UTMA). It is suitable for beneficiaries under age 25 in Florida.

If you want management to last longer than the UTMA allows, you can create a child’s trust for one or more of your beneficiaires.

Under either method, you appoint an adult to manage all property left to a beneficary until the beneficiary reaches a specified age. Under the UTMA, the age the management must end is from 21 up to 25. Under the trust method, the age can be from 18 up to 35.

 

The Worst Scenario: If You Do Not Provide Property Management for a Minor in Your Will


If the beneficiary you name in your will is a minor, you don't set up property management, and the property you leave him or her is worth more than $2,000 or so, a court will likely appoint and supervise a guardian to manage the property.There are often drawbacks to property guardianships set up in court. They must end at age 18 and are commonly cumbersome, expensive and impersonal. Court approval is often required for routine management decisions, and costs and legal fees are deducted from the property being managed. And they leave open the possibility that the judge may appoint someone unfamiliar with and unsympathetic to the minor's needs.

 

The Uniform Transfers to Minors Act


The Uniform Transfers to Minors Act (UTMA) allows you to name a custodian to manage property you leave to a minor. The management ends when the minor reaches age 18 to 25, depending on state law. In Florida, it's 21. Form America includes these in wills for all 50 States, and we make it state specific and legally compliant based on your State law.


States are free to adopt or reject the UTMA, which is a model law proposed by a group of legal scholars. Every state except South Carolina has adopted the UTMA, many making minor changes to it.


Unless you live in South Carolina, you may use the UTMA to specify a custodian to manage property you leave to a minor in your will until the age at which the laws of your state require that it be turned over to the minor. Depending on your state, this varies from 18 to 25. WillMaker keeps track of the state you indicate as your residence and tells you the age at which property management under it must end.


Among the powers the UTMA gives the custodian are the rights to collect, hold, manage, invest and reinvest the property and to spend it "for the use and benefit of the minor." All of these actions can be taken without getting approval from a court. The custodian must also keep records so that tax returns can be filed on behalf of the minor and must otherwise act prudently in controlling the property.


 

The Child's Trust


The child's trust, which can be used in all states, is a legal structure you establish in your will. If you create a trust, any property a minor beneficiary gets will be managed by a person or an institution you choose to serve as trustee until the beneficiary turns an age you choose— through age 35. The trustee's powers are listed in your will. The trustee may use trust assets for the education, medical needs and living expenses of the beneficiary. All property you leave to a beneficiary for whom a trust is established will be managed under the terms of the trust.


Because management under a child's trust can be extended through age 35, it is also suitable to use for property left to young adults. It's a much more complicated legal structure than is usually necessary for simple estates.

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