Leaving property and assets to minor children in a will can create many legal complications. For example, until a child reaches the age of adulthood (an age that varies depending on the laws of the state in which you live), they will not be able to control any property or assets that were left to them in a will.
These challenges, however, should not stop you from arranging a will or trust that includes your young children. If you do not do it, then the state will do it for you. This is due to the fact that every state has statutes that dictate how to distribute property upon the owner’s death.
This means that the state laws may not distribute your property in accordance with what you intended. Therefore, it is in you and your family’s best interest to arrange a will or trust in the manner in which you wish to distribute both your property and assets.
If this seems like a daunting task, you should consider contacting an experienced estate lawyer for help. They can provide useful information and legal guidance that can make this a much easier process for you. Otherwise, based on the complexities of wills, trusts, and estate rules, there is a risk that the people you care about may not receive the proper distributions.
The following sections provide some basic information on leaving property and assets to children. However, this is one area of the legal system where it truly is better to consult a local lawyer for counsel and advice that is tailored to the laws of your state’s jurisdiction.
- How Can I Arrange to Leave Property or Money to My Children?
- How Do I Leave Real Estate to My Children Upon Death?
- What Happens If One Child is an Adult, but the Other Children are Still Minors?
- How Do I Include Stepchildren or Foster Children as Part of My Estate?
- Do I Need a Lawyer for Help with Creating a Will or Trust that Includes Young Children?
How Can I Arrange to Leave Property or Money to My Children?
There are several common ways to ensure that your children will inherit your possessions once you have died. They include:
- Appointing a Property Guardian: This is simply a person whom you appoint in your will to manage any property that you want to pass on to your child until they reach adulthood. This individual can also be appointed as the child’s legal guardian until they reach the appropriate age of adulthood;
- Appointing 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, they will gain control of the property that you passed on to them;
- Creating a Trust: It is possible for you to set up a trust for your child or children that states how and when the child will inherit the property you specified, along with any restrictions included in the use of that property. In the event that your child is not of the proper age when you die, you can list a “trustee” that will manage the trust until your child or children are old enough to receive that property;
- Note: Being a trustee tends to involve more work than being a custodian. For one, you will be responsible for taking care of any taxes on items included in the trust. There are also various other duties legally assigned to the role of a trustee; and
- Creating a “Pot Trust”: If you happen to have more than one child, you may want to consider incorporating them all under one trust called, a “Pot Trust.” You can then assign a trustee (an individual who can be granted great flexibility over the trust). They can judge how much money from the trust that each child will need until they all become adults (usually, at 18 years old);
- Note: The one pitfall of a pot trust is that the oldest child will not be able to receive any of the property from the trust until the youngest child is legally considered an adult.
How Do I Leave Real Estate to My Children Upon Death?
There are generally two options to choose from when attempting to give ownership of real estate to others upon death. The first way is by directly stating so via a will. Remember to include the names of the child or children, and the exact addresses of the property being granted.
The second way is by adding the child or children’s name(s) to the deed of the house and offering it to them as a gift. Keep in mind that when giving the house or property as a gift, the deed must be presented to the child or children in person. Also, the gift may be subject to gift taxes by the IRS.
In most states, minors cannot own real estate. As such, either a guardian must be appointed or a trust must be created. This will ensure that the child or children can retain use of the property until they reach the age of adulthood, which again, is typically eighteen.
What Happens If One Child is an Adult, but the Other Children are Still Minors?
The answer to this question will vary from state to state, since some states forbid minor children from directly inheriting property. Other states require that the adult children be specifically named in a will to be able to inherit anything.
If you trust that your adult child will not sell the property and will maintain the property for the benefit of their younger siblings, then you may appoint your adult child as the property guardian (or trustee). They will then manage the property on behalf of all of your children.
How Do I Include Stepchildren or Foster Children as Part of My Estate?
In most states, stepchildren or foster children are automatically excluded from being included in the deceased’s estate. This is true unless the stepparent or foster parent takes specific steps to ensure that the stepchildren or foster children are explicitly included.
The most popular method used to ensure that the stepchildren or foster children will inherit from an estate is for the stepparent or foster parent to formally adopt the child. Adoption usually places the adopted child in the same legal standing as a natural child when inheritance is in issue.
In some states though, even adoption is not enough. To absolutely ensure that stepchildren or foster children will be able to inherit from the estate, you should specifically name the stepchildren or foster children in your will. You should also explicitly state your exact intentions for what it is that the stepchildren or foster child should inherit or share with your natural born children.
Do I Need a Lawyer for Help with Creating a Will or Trust that Includes Young Children?
In general, wills, trusts, and estates, are all areas of law that present many challenging legal issues. This is partially due to the fact that many decisions and procedures are based on varying state laws.
These matters become even more complex when you add young children into those issues, especially when you have to decide which type of will or trust is best to pass on your belongings to them.
As previously mentioned, it would highly benefit you to consult a local, experienced will lawyer who fully understands estate planning. They can use that knowledge to help you make informed decisions, and can advise you of all of the legal formalities involved in wills, trusts, estates, plus any tax implications that need to be taken into account.