Your children will not be able to control any property or assets you leave to them in a will until they have reached the age of adulthood in the state you live in. However, you shouldn't wait to arrange a will or trust that includes your children. If you do not create a will or trust, your property will be distributed to your children according to your state's statutes that deal with property distribution. These laws are not always in accordance with what you intended.

How Should I Arrange to Leave Property or Money to My Children?

There are actually several common ways of making sure your children will inherit your possessions once you have died:

  • A Property Guardian - this is simply someone who you appoint in your will to manage any property that you want to pass on to your child until your child reaches adulthood. This guardian can also be appointed to be the children's legal guardian until they reach adulthood.
  • A Custodian - if you decide to leave your child property under the Uniform Transfers to Minors Act (UTMA), you can appoint a custodian to manage the property by listing them in your living trust or will, or as a beneficiary in your life insurance policy. Once the child becomes a legal adult, he will get control of the property you passed on to him.
  • A Trust - you can set up a trust for each child that says how and when the child will inherit the property you specified, along with any restrictions included in the use of that property. In case your child will not be of age when you die, you can list a "trustee" that will manage the trust until your children are old enough to receive the property. Note: being a trustee tends to involve more work than being a custodian; for one thing you will have take care of any taxes on items included in the trust.
  • A "Pot Trust" - if you have more than one child, you may want to cover them all in one trust. You can assign a trustee, who has great flexibility with the trust and can judge how much money from the trust each child needs until they all turn 18. The pitfall of a pot trust is that the oldest child cannot receive any of the property from the trust until the youngest child is legally an adult (usually 18 years old).

What About Real Estate?

There are usually two options when trying to give ownership of real estate to others upon death. The first way is by directly stating so through a will. Be sure to name the children and the exact address of the house. The second way is by adding the children’s name to the deed of the house and presenting it to them as a gift. Keep in mind that when giving the house as a gift, the deed must be presented to the children in person and the gift may be subject to gift taxes by the IRS.

In most states, minors cannot own real estate. As such, a guardian or trust must be appointed or created to ensure that your children can retain use of the property until they reach the age of adulthood, typically eighteen.

What Happens If One of My Children Is An Adult But My Other Children Are Still Minors?

The answer will vary state by state, as some states forbid minor children from directly inheriting property while other states require that adult children be specifically named in a will to inherit anything.

If you trust your adult child not to sell property and to maintain the property for the benefit of his or her younger siblings, you could appoint your adult child as the property guardian or trustee to manage the property on the behalf of all your children. 

How Do I Include Step or Foster Children In My Estate?

In most states, step or foster children are automatically excluded from being included in the deceased’s estate unless the step or foster parent takes specific steps to ensure that the step or foster children are included. 

The most popular way to ensure that step or foster children will inherit from an estate is for the step or foster parent to formally adopt the child. Adoption usually puts the adopted child in the same legal standing as natural children when inheritance is an issue.

In some states though, even adoption isn’t enough. To absolutely ensure that step or foster children will be able to inherit from your state, you should specifically name your step or foster children in your will and exactly what it is you intend for the step or foster child to inherit or share with your natural born children.

Should I Consult an Attorney When Creating a Will or Trust?

Deciding which type of will or trust would be best for passing on your belongings to your children can be difficult and complex. An estate lawyer who has experience in estate planning can help you make decisions, and inform you of all the legal formalities and tax implications.