When you make your will with WillMaker, you will have a chance to set up property management for any young beneficiaries who might receive property under your will.
If you choose to set up property management, you will name trusted adults to look after the property on behalf of the beneficiaries until they are old enough to manage it for themselves.
WillMaker offers three types of management for property that passes under your will. One of those –the pot trust—is just for the willmaker's children. The other two the UTMA and the child's trust—can be used for any beneficiaries who might receive property under your will. This includes any first-choice beneficiaries, as well as alternates who might (or might not) receive a gift through your will.
When you're making your will, after you choose to use the UTMA or child's trust, the program will provide a list of your beneficiaries, and you'll need to decide for whom you want to provide property management. This article provides some information to help you make that decision.
If you plan to leave your children property (as first choice beneficiaries or alternates) and they are minors or young adults, you'll probably want to provide property management for them. You can choose to use the pot trust, the UTMA, or individual child's trusts.
If your children are minors, you will probably also want to name a property guardian for them. The property guardian will manage any property that your child owns or acquires outside of your will—like other inheritance or earned income. You'll make this choice later in the interview.
Minors are children under 18. Minors cannot legally manage property worth more than about $2,000 (some states slightly more or less). So in most cases, it makes sense to name someone to manage property for minors until they become old enough to manage it themselves.
You can also provide property management for young people who are not minors, but who are not yet mature enough to manage their own money. The age at which property management ends depends on which type of property management you choose.
Tip: Do not set up property management for beneficiaries older than the age of termination. For example, if your state ends UTMAs at age 21, do not set up an UTMA for a beneficiary who is 25. Practically speaking, there is no harm done if you do…the provision will just be ignored—however it could cause confusion at the time of reading the will.
Whether you set up property management for young adults depends on the type of property you're leaving and your best guess at whether the young person has the skills and temperament to manage the property without help.
If you're naming young people only as alternate beneficiaries, it still is wise to set up property management for gifts that they might receive. Doing so acts as insurance that your wishes will be followed as nearly as possible. If they are not called to step in and take the property, the management will not be established.
EXAMPLE: Barbara names her favorite niece to take property as an alternate beneficiary and in her will she provides provide management for that property until the niece turns 25. If the niece never gets to take the property because the first-choice beneficiary survives Barbara, no property management will be established for the niece, since none will be needed.
If the beneficiary you name in your will is a minor and the property you leave him or her is worth more than $2,000 or so, a court will likely appoint and supervise a guardian to manage the property.
There are often drawbacks to property guardianships set up in court. They must end at age 18 and are commonly cumbersome, expensive and impersonal. Court approval is often required for routine management decisions, and costs are deducted from the property being managed. And they leave open the possibility that the judge may appoint someone unfamiliar with and unsympathetic to the minor's needs.
If you do not provide property management for a young person who is no longer a minor (older than age 18), that person will receive the property outright and will be on his or her own to manage the property.
Neither the UTMA nor the child's trust provides the right property management needed for those who have significant disabilities, receive disability benefits, or who have other severe problems such as substance abuse. For beneficiaries with disabilities, you can read more about using a "special needs trust." Also, consider consulting a knowledgeable lawyer to learn about out the best legal options available.
If you want to explain the choices you make in your will, we suggest that you do so in a letter that you attach to the will rather than in the will itself. This avoids any chance that you will accidentally add confusing or conflicting language to your legal document. A letter to your survivors is a good, informal way to share the thoughts and reasons behind your decisions. If you want to write one, we offer guidance and examples to help you along.