Many families beginning the estate planning process are motivated to create a will or trust for their young children. While most people understand that creating an estate plan is important, it is often the well-being of the children that is a large motivator to finally get the process started. Making choices about how and when to pass assets to your children is important in order to avoid unnecessary court involvement or undesired consequences when the estate plan is actually implemented. Using a living trust is often an excellent choice for managing and protecting assets until your beneficiaries reach a chosen age. For those who do not opt to use a trust however, a will can also incorporate certain provisions, like a custodian provision, that give you some control over the when and how of when your young beneficiaries will receive your assets.
A Custodian Provision in a Will for Young People Inheriting Property
One option when creating your estate plan is to incorporate a custodian provision in your will. A custodian is a person who is put in charge of the asset until the minor beneficiary reaches a predetermined age. As you consider whether to use such a provision, think about the following:
- Whether you are concerned about property passing outright to a minor who is over age 18 but under age 25.
- Names of your first, second, and third choice individual to serve as custodian of the assets.
- What age you think is appropriate for your beneficiary to receive the property.
- Whether you want to appoint an individual, bank, or trust company as custodian of the property.
If you do not use a custodian provision in your will, any assets that pass to a beneficiary who is under age 18 may be given to the beneficiary’s parent or legal guardian. However, the assets will only be held until the beneficiary reaches age 18. For many people, the thought of a child inheriting property at 18 is concerning because he is still very young. In addition, if no custodian is appointed, the court will require the parent or guardian to furnish a bond.
Did this article answer your questions about whether to include a custodian provision in your will? For more helpful information, we encourage you to contact us today or to sign up for our free newsletter today.