Posts tagged trusts
What if I want to leave property or other gifts to a minor?

Making a gift to a minor may be difficult for a number of reasons. The minor may not be legally able to manage the property that you leave for them. In addition, they may not be responsible enough to manage the asset for their long term benefit.

For some, making gifts to their minor children may be a technique to reduce the size of their estate for estate tax purposes. Whatever the reason may be, there are a couple of options for making a gift to a minor that may be suitable depending on your specific situation.


Some people decide to use a trust as the primary vehicle for holding and managing property for a minor. The trust has the benefit of having a Trustee who can manage the trust asset and who may be granted the discretion to make distributions to or for the benefit of a minor child. This trust could be established for your child either while you're alive, or it can be set up at the time of your death.

One downside to using a trust, however, is that the cost of maintaining a separate trust for a minor child may be excessive in relation to the value of the assets held in the trust. 

California Uniform Transfers to Minors Act

Where the gift to minor person is relatively small, using a custodial account under the California Uniform Transfers to Minors Act (CUTMA) may be more attractive. Generally, the gift is held by the Custodian you select until the minor child reaches a specified age.

Figuring out the best way to transfer your assets to minor beneficiaries can be challenging. Most people grapple with the desire to provide for the child but not grant unfettered access in a way that would cause the minor to lose motivation in pursuing his or her own life goals. Estate planning lawyers can provide helpful insights on how to structure such a gift.

What if you become incapacitated but you're still alive?

Figuring out what to do with your assets after you pass away is a large component of estate planning, but generally, planning for the proper management of your financial and health care while you're alive is another major component. There are 3 broad avenues that may need to be used if you become incapacitated to the point where you are no longer able to express your wishes.

Medical Decisions

First, the Advance Health Care Directive may be needed to give proof to doctors or hospitals that the agent you've selected has the authority to make medical decisions for you. Without this, your family might run into conflicts about what you want regarding medical treatment.

Financial Decisions

Second, the Durable Power of Attorney may need to be recorded in the county where you own real estate or be provided to financial institutions where you have accounts so that your agent can transact on your behalf. This can be a huge benefit and help your family avoid the need to have a conservator appointed for you.

Successor Trustees

Third, if you've established a trust, the successor Trustee of your Trust may need to be called into action to take control of the trust assets so that they can continue to be used for your benefit. For those who have trusts, the assets held by that trust can only be utilized by those who have authority to do so, and the successor Trustee is the first in line. This also helps your family avoid the need for a conservatorship.

As such, the nature of an estate plan can be just as important while you're alive as it is after you pass away.

How do I maintain control over property I give away?

A basic function of estate planning is to make sure the people or organizations that you want to receive your property actually receives it, but have you really thought about how that would work? Would you just give a lump sum to your teenage son or daughter? If you left money for a charity, how would you know they are using it in the way that you want? What if a person you wanted to leave something to passed away before you--who would get it then? If you have a business, will your partners buy you out? Or, will your family join the business and work in it?

Some Basic Techniques

As a general rule, I think the "KISS" method works quite well in estate planning. (KISS = "Keep It Simple, Stupid") The more complications that get introduced to a distribution scheme, often the more failure points you may be introducing. That being said, there are some basic, tried and true techniques that work and are often good to implement. Here are some of them:

  1. Leaving gifts to a young beneficiary in a trust that call for distributions at various ages. Or, if the amounts are rather small, utilizing "CUTMA" to hold the property for the beneficiary until he or she reaches a certain age.
  2. Utilizing a marital trust to hold property for your spouse to give him or her lifetime enjoyment of those assets, but also ensure that specified beneficiaries (often children) will receive whatever is leftover.
  3. Providing that where a named beneficiary fails to outlive you, the property going to that person will get distributed among his descendants. This is a commonly used provision where you want to benefit not just the beneficiary you've named, but also that person's family.

If you engage an estate planning lawyer, you will undoubtedly face one or more of these concepts depending on your situation (e.g., whether you are in a relationship or have children).

What is Estate Planning?

Before we can start talking about how to begin the process of preparing your estate planning documents, you need to get an idea for what estate planning is.

Estate Planning Overview

At its core estate planning is a process where you develop a plan for how your assets (e.g., real estate, bank accounts, etc.) will be used while you're alive and after you pass away. Often this is where "Wills" and "Living Trusts" come into the picture. An estate plan also includes documents such as an Advance Health Care Directive that make sure someone is in place to make health care decisions for you if you become incapacitated (i.e., you're no longer able to communicate your wishes). Finally, planning for any minor children you may have is another major component of an estate plan. The end product of this process is generally a set of estate planning documents that specifies your wishes.


Developing an effective estate plan involves analyzing various moving parts and how they all interact with each other, and frequently having an estate planning lawyer guide you makes a lot of sense. Here's just a brief list of things you might need to think about:

  1. Who will be in charge of making sure your assets get distributed to your family or loved ones?
  2. Who will take care of any minor children you may have?
  3. If you own a business, what will happen to it if you suddenly pass away?
  4. How can you minimize the impact of income, estate, and property taxes as a result of your death?
  5. How can you put a process in place so that your assets get distributed to your beneficiaries over time?
  6. If you suddenly became incapacitated and couldn't communicate your wishes any more, who would make medical or financial decisions for you?

Carrying Out the Estate Plan

As with any plan that is put in place, the eventuality is that it must be carried out. This latter phase is often referred to as estate or trust (if you've set up a trust during your lifetime) administration. During this stage, the Executor or Trustee is tasked with carrying out the wishes that you've specified in your estate planning documents.