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Any parent wants to make sure your children have a good life. When the unexpected occurs, and you are no longer around to take care of them, a well-constructed estate plan can protect your child’s inheritance until such time he/she is old enough to be financially responsible. One way to protect your assets for your children is through a minor’s trust. It allows you to give the gift of financial security to your children without the worry of gift taxes.
But to set up a minor’s trust, it’s best to speak with an experienced estate planning attorney to help you through the process. At Martin Heller Potempa & Sheppard, PLLC, our Tennessee estate planning lawyers have been working with families across Middle Tennessee to protect their assets for their children. We can help you with the drafting, reviewing, and implementing the trust, so no issues arise after you are gone.
How Minor’s Trusts Work
Trusts for minors, also known as minor’s trusts, is used to protect the assets and property for a child until he/she is old enough to be financially responsible. The trustee, who is over the age of 18, will care for the property and assets until such a time when the child reaches an age of majority.
In Tennessee, the minimum age of majority is 18, but the grantor of the trust can choose another age. Once the minor child comes of age, the beneficiary will receive notice that the assets of the trust are available. The recipient has up to 60 days to claim the assets.
If the beneficiary fails to claim the assets within the 60-day window, the funds will remain in the trust but will not be in the beneficiary’s control. The heir may not regain access for a specific period of times, usually between 5 to 10 years.
The Benefits of a Minor’s Trust
The purpose of minor’s trusts is to make a gift to a minor while avoiding any federal gift taxes, also known as a “gift tax exemption.” Although the youth does not have immediate access to the trust, the gift tax exemption still applies to this case.
For the trust to qualify for tax exemption, it needs to meet the following requirements:
The minor is the only stated beneficiary of the trust.
The assets and income of the trust are transferred to the recipient once the child reaches 21.
The minor has the right to distribute their trust assets if he/she passes away before reaching the age of 21. For example, your child can state how to distribute the trust after his/her death in a legal document or will.
Contact Our Nashville Trust Attorneys Today!
Setting up a minor’s trust can be difficult, especially if you have a high-value estate. You need to make sure your intentions are spelled out in your estate plan and you have the right trustee chosen to oversee its maintenance after you are gone. Remember, this is your child’s future – it needs to be secure.
For decades, the trust lawyers of Martin Heller Potempa & Sheppard, PLLC have helped people across Middle Tennessee prepare a trust. We have helped our clients not only select the best person to administer the trust but have stepped in as trustees. We know the complex issues surrounding building a secure trust for your child and will do everything we can to make sure everything runs smoothly.
If you are considering creating a minor’s trust and need help with the administration of that trust, don’t delay. Contact Martin Heller Potempa & Sheppard, PLLC now for more information.