Along with the joys of becoming a new parent also brings a new sense of responsibility, especially making sure that in case of a tragic accident your offspring would be taken care of physically and financially.
Because current laws don’t allow children to manage inherited property until they reach adulthood, you must first use your will or trust to name someone who will manage your property until your children become adults. There are several ways to structure a property management arrangement, Nolo’s Encyclopedia of Everyday Law gives us the most simple and useful:
1. Name a custodian under the Uniform Transfers to Minors Act
Arizona, along with 48 other states have adopted this law that allows parents to choose someone, named a custodian, to manage property you are leaving to a child. This person will have control of the property and when the child reaches your state’s “adult” age, the child will receive what is left of the trust property outright. According to Arizona Revised Statutes 14-7651 an adult means “a person who is at least 21 years of age. “
2. Set up a trust for each child
Parents use their will to name a “trustee” who will handle any property the child inherits until the child reaches an age the parent specifies. When the child reaches that age, the trustee ends the trust and gives whatever is left of the trust to the child.
3. Create a family trust for your children
Sometimes called a “pot” trust, parents set up one trust for all of their children. In your will you create the trust and appoint a “trustee.” The “trustee” does not have to split the money accordingly to each child. They have the right to give each child what they decide is necessary. When the youngest child reaches the established adult age, the trust will end. The remaining property in the trust will then be distributed as the parents directed.
4. Name a property guardian
If you do not wish to create a trust for your child, you can use your will to name a property guardian for them. If in the event of your death, your child needs a guardian, the court will appoint the person you named. This person will be in charge of your child and whatever property the child inherits until they reach legal adult age.
If you are a new parent or a parent of many years and you haven’t established a will or trust for your child, please speak with one of JacksonWhites’ Estate Planning Attorneys today at (480) 426-8359.
Call our Arizona Estate Planning team at (480)467-4325 to discuss your case today.