When crafting their estate plan, many individuals want to leave assets or gifts to their children, grandchildren, or other loved ones under the age of 18. However, there can be unique issues presented when gifting assets to minors, as compared to other adults. Most people do not consider these implications when crafting their estate plans. But there are ways in Texas to still gift property and assets to minors in which they can benefit from these gifts in the future. Below is information about these options, along with explanations of the most common questions asked about gifting to minors in Texas.
Why is Gifting to Minors Different than Gifting Assets to Adults?
One reason why individuals must gift differently to minors is that people under the age of 18 lack the legal capacity to own property. So, when a loved one passes away and has left assets in their will to a child, there are different rules that apply. Similarly, people may be afraid to leave assets or property to minors—worried they would mismanage the funds or not be responsible enough to handle such a gift. This is a common concern; however, it should not be the reason that minors are not included in a will.
The Texas Uniform Transfers to Minors Act
One method to still gift to Texas minors—while avoiding all of the complications above—is the Texas Uniform Transfers to Minors Act (TUTMA). Under this act, all assets gifted to a minor will be held in a custodial account until they reach the age of 21. As well as invoking the TUTMA in the will, the individual gifting the property must also name a custodian in their will. This custodian will manage the assets for the minor’s benefit until they can utilize them.
TUTMA does not mean that the funds cannot be spent until the minor is 21 years old. Instead, the custodian can use the funds for the minor’s best interest—including for school, transportation, or other purposes. Using the TUTMA allows loved ones to still leave assets to minors; however, they do not have to worry about the minor misusing the funds since there is a custodian there to guide them.
Gifting assets to minors may seem confusing or overwhelming. But it should not be. Reach out to an experienced estate planning who can assist with this process.
Contact a Houston Estate Planning Attorney
If you or a loved one needs assistance drafting an estate plan, contact the Houston estate planning attorneys at McCulloch & Miller, PLLC. With decades of experience helping Texans with a wide variety of estate planning issues, our attorneys can answer your questions about gifting property to minors—along with other estate planning topics. Estate planning should not be another added stress to your lives—we can ensure this is one less thing to worry about. To speak with one of our knowledgeable attorneys and to schedule an initial consultation, give us a call today at 713-333-8900.