When individuals are crafting their estate plan, they often think about the younger loved ones in their lives—be it children, nieces and nephews, or grandchildren. They may want to leave property, financial assets, or family heirlooms to these minors. However, because minors usually lack the legal capacity to own property, there are different rules in place for gifting to those under 18 years old. Because of this, it is important for individuals to reach out to experienced estate planning attorneys who can help them navigate the process and ensure they are complying with federal and Texas estate planning laws.
How to Include Children in an Estate Plan
Because minors cannot legally inherit property, individuals wishing to include their children in their will must take additional steps. Texas estate law provides for minors who are given assets and property through an estate plan. Under the Texas Uniform Gifts to Minors Act, children’s assets are held in a managed account until they reach the age of 21. While individuals are usually only considered a minor until they turn 18, the law considers a minor anyone under 21 years old. In the will, the parents must designate a custodian who will manage the assets for the child’s benefit until they are no longer a minor. While this may be upsetting to some children, the point of this law is to ensure the funds are not irresponsibly spent. Instead, with the supervision and assistance of a custodian, there is a much higher chance the funds will be sensibly spent—if used at all—until the minor is older.
However, the requirements of the Uniform Gifts to Minors Act do not mean that the funds given to minors cannot be touched until they are 21 years old. The custodian is given a lot of discretion in utilizing the funds—so long as it is for the minor’s benefit. For example, if the minor needs funds to pay for college or assistance with transportation, the custodian can either purchase items for them or pay tuition on their behalf. Since the custodian has a lot of discretion, individuals should not make this decision lightly: who do they trust implicitly, would communicate well with their children, and make the best—and responsible—decisions on their behalf.
While the Texas Uniform Gifts to Minors Act may not seem complicated, the law’s reach is far, and it is important to understand its impact. Because of this, people who are thinking of leaving assets or property to minors in their estate plan should contact a knowledgeable estate planning attorney for assistance.
Contact a Houston Estate Planning Attorney
If you or a loved one has questions about your estate plan, contact the Houston estate planning attorneys at McCulloch & Miller, PLLC. With decades of experience helping individuals to create—and alter—estate plans, our knowledgeable attorneys are here to assist you. We understand that estate planning laws can often be complicated, and they have dramatic consequences if not followed correctly. To avoid making any mistakes with your estate plan, give us a call to schedule a consultation at 713-333-8900 today.