Friday, August 10, 2012

Boise Probate Attorneys - Estate Planning (208) 472-2383

Probate and Minor Beneficiaries
As a Boise Probate Attorney I regularly assist clients in the probate of a loved one's estate.  These probate issues often come to me after the fact, meaning that I did not draft the original will.  One of the major issues I see has to do with providing for minor children under a will.  No one hopes to die before their children come of age.  The big problem comes in if you do die before your children reach the age of majority and you have failed to provide anything specific under the will for them.

While some individuals create very complex wills or living trusts to assist in their estate plan, many people rely on simple wills.  In general, these wills leave everything to the spouse and if the spouse predeceases them, then to their children.  This works fine, unless your children are under the age of 18.  Who wants a $250,000 estate to go directly into the hands of a minor?

Estate Planning Solutions for Minor Beneficiarie:
Will Solutions
What, then, do you do?  As an Estate Planning Attorney I would suggest a few different approaches.  First, of course, you should try to deal with the issue before it becomes an issue.  By this I mean, even if you only want a simple will, you should make a provision dealing with the distribution of property in case you die before your child reaches majority.  The way to go about this is to insert a trust provision which handles who will distribute the property or funds to the child, when and in what amounts.  This effectively allows you to prevent a very large sum of money ending up in the hands of a child.  You can do this very simply by creating the trust and naming the trustee.  You could also simply nominate a custodian for any beneficiary under the age of 21.   In this situation, it is helpful to add a letter of direction, telling the custodian what you want them to do with your property and how to distribute or invest it for your minor children.  This allows you to have control of how the property is distributed until your children reach the age of 21 instead of the age of 18.  You can create further control over distribution if you follow the Idaho Uniform Custodial Trust Act (UCTA).  This Code section technically allows a beneficiary to terminate a trust at the age of 18.  However, if the will provision is created stating the share of any beneficiary under 30 is to be held in trust, you can bypass the beneficiaries ability to terminate it sooner.

Another solution is to create a living trust.  In effect, a living trust takes your property out of your estate.  You can establish revocable trust directing where your property will go and how it will be distributed.  This approach also allows you to bypass probate if you place all your property in the living trust.

Probate Solutions
So what happens if you are on the opposite end of the situation and both parents of a minor child have died?  If you have a small estate (under $10,000) the personal representative has the option of doing four different things.  They may distribute the money directly to the child if the child is 18 or older or married.  The PR may distribute the money or property to the person who has the care and custody of the child and with whom the child resides.  The PR may direct the money to the guardian of the child.  Or, lastly, the PR can place the money in an account in the minor's name.

If the estate is larger than $10,000 the Personal Representative has two courses of action.  They can distribute the funds to a conservator or petition the court to transfer the moneys under the Idaho Uniform Transfer to Minors Act (UTMA).  The difficulty relying on this code section for probate attorneys is that the act provides no guidance to the conservator, nor do they have any guidance from the deceased parents.  There is no way they can hope to carry out the wishes of the parents.  In addition, under the act, the money must be distributed when the child turns 18.  In some situations, the court will hear a petition to extend that to age 21. 

As a Boise Probate and Estate Planning Attorney, I feel that it is better to anticipate a potential problem by inserting a very specific plan into your will.  It may never have to come into place, but if it does, your minor children can be provided for and you can prevent them from squandering their inheritance before they reach maturity.

If you have a probate or estate planning issue and you need to speak to an attorney, please give us a call, (208) 472-2383 and see what we can do for you.

1 comment:

  1. Great post. When I was younger my parents had to hire a California probate attorney for my great uncle's will. I was to young to know what was going on. Thanks for all the great information!