American Estate Planning Attorney Directory

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Wills and Children

What's the best way to leave property to a minor?
You and your spouse can leave property to a minor directly by a bequest in your wills--but if you die before the child is grown, he or she will not be able to take the money directly. The law would require the creation of a court-supervised guardianship. While the judge will likely appoint a competent adult family member as property guardian, the judge may also have the power to appoint an outside lawyer to administer it. That could cost your child a lot of money, because a court-supervised guardian is entitled to fees from the minor's estate. Even a family member who doesn't take fees would have to file frequent accountings with the court and be subject to strict supervision over how funds are spent -- which may require the assistance of a lawyer and an accountant. When the child turns 18, the guardian must give him or her the money.

If you name a property guardian, it's a good idea if it's the same person who is your child's personal guardian, and your alternate choices should match as well. Having separate people handle these functions is fraught with potential for conflict.

Given the many drawbacks of using a property guardian, there are two other ways of leaving property to children that should be considered. One is to leave property to a child under the Uniform Transfers to Minors Act. This act, which has been adopted in most, though not all, states, lets you appoint a custodian who has broad authority to manage and dispense funds for your child without constricting court supervision and accounting requirements. A child receives the balance of the funds at anywhere from ages 18 to 25, depending on the version of the UTMA adopted by your state.

A UTMA custodianship works particularly well for relatively small amounts of money--$50,000 or less. Amounts above that leave open the possibility that a child could end up receiving a large chunk of money at a relatively young age. That may not sit well with you if you want to assure that someone will oversee your child's finances through the time he or she is in colleg, or if your child needs special care of some kind.

In this case, the option you may turn to is a trust, which in this case would be called a children's trust. You select a trustee and give him or her broad authority to use both income and, if necessary, principal from the trust assets to provide for your child's living expenses, health care, and education. You also specify the age at which the child gets control of the trust propety. As with a UTMA transfer, there is no court supervision. However, trust income may be taxed at a significantly higher rate than income in a UTMA account. A children's trust can be set up as part of your will, or outside it.

What's the best way to choose a guardian?
Two concerns arise in providing for minor children after your death. The first is who will take custody of the children and provide for their care and upbringing--what is known as a personal guardian. The second issue involves the best method for providing and administering financial support for your children.

In the event of the death of a biological or adoptive parent, it is almost certain that the surviving parent will retain sole custody of minor children, unless that parent is proved to be unfit or incompetent--because of problems with alcohol or crime, for example. The real issue when thinking about selecting a child's personal guardian is who to name in the event both parents die. In selecting a personal guardian, you should choose the person you think will do the best job, of course, but it should be someone the court will find capable of taking proper care of the child. Courts usually give most weight to the selections made by the last surviving parent in his or her will, but a judge's duty is to serve "the best interests of the child," not the desires of the deceased parents.

Still, if two parents have been involved in raising a child, a court may look to the guardian named in each parent's will, and it's best if that is the same person. Other things a court would consider include how much contact the person has had with the child, what kind of resources he or she has to take care of the child, and what his or her ideas are about such things as education and upbringing. A step-parent has no special rights to custody, though he or she might be named guardian if both natural parents die.

You should ask the person you're thinking of in advance whether he or she agrees to take on such a responsibility. It's also important to name an alternate personal guardian, in case your first choice is unable or unwilling to serve. And finally, even if you think of having another couple serve as guardians, it's best to name only one member of the couple, to avoid problems in the event that couple splits up.

What happens to a child who is born after a will is made in the event the parents die?
Most states have "afterborn child" laws that permit children to receive bequests if they were born after a will was signed, as long as the will makes provisions for the children who had been born at the time it was executed. The afterborn child typically gets the same portion of the estate as his or her siblings.

A good way around this potential problem is to avoid using specific names of children when dividing up the residuary estate. Instead, you can leave it to "all my children, in equal parts." (An old-fashioned term for children used in some wills is "issue.")

What inheritance rights do adopted children have?
Most states have passed laws giving adopted children the same inheritance rights as natural children, with minor exceptions. Usually, adopted children have no right to inherit from their natural parents, though of course the natural parents might decide to leave them something in their will.

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AEPAD is the American Estate Planning Attorney Directory.  While the information on this site deals with legal issues, it does not constitute legal advice. If you have specific questions related to information available on this site, you are strongly encouraged to consult an attorney who can investigate the circumstances of your situation and the particulars in your state.