Leaving the Property to Your Children with Legal Forms

May 1
07:59

2010

James Kahn

James Kahn

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Parents, who still have minor children,Leaving the Property to Your Children with Legal Forms Articles always think about the welfare of their kids.  They are concerned about how their children would fare in cases of unforeseen accidents.  Sometimes parents wonder what would happen to their children if every some type of accident would happen to them, in which one or both of them would die.  And because of these dreadful thoughts, it is not too late to prepare for the future.  Using legal forms, parents are preparing for their children.  In these estate plans, you can legally leave behind your properties to your children.

Managing a property is difficult, more so, when determining how to legally leave behind your properties to your children. There are three ways to do this, and they are discussed as follows:

- Through a custodianship, under the Uniform Transfers to Minors Act

- By leaving behind a trust fund, either by an individual child’s trust fund or a combined family trust fund 

- And through a property guardianship

Custodianship, under the Uniform Transfers to Minors Act

The Uniform Transfers to Minors Act (UTMA) can be an option to choose from.  Parents who use this way leave behind a will or living trust.  Almost every state in the US has adopted this law, except for South Carolina and Vermont, and is a convenient way of leaving behind your properties.  An adult manager, called a custodian, is appointed.  The custodian can be anyone the parents choose from.  The custodian can only care for a child when he/she has reached the age of 18 to 25, although depending on the state. 

How UTMA works, leaving behind a gift

With the use of legal forms, any parent can leave behind a will or a living trust, which specifies important details of the properties that will be left behind to their children.  Also included is the identification of a beneficiary for the gift.  Furthermore a parent will also have to name the adult custodian that would care for their children in the event of the parents’ death.  The custodian will have the sole responsibility of managing the properties until the child is of legal age.  A very reasonable amount would be given to the custodian, as a form of compensation, for the services he/she has rendered through a period of time.  In the event that the primary custodian cannot finish the task, then any parent can name a successor custodian as well. 

As declared by the UTMA, any chosen custodian will have legal rights and have the discretion over the control of any properties, provided that it is for the child’s interests.  No court supervision is required for a custodian, thereby giving it a clear difference from a power of attorney.  Integrated in most states, the UTMA should be considered by most financial organizations, thus making it easier for a custodian to manage any properties.  A separate tax return is required to be filed under the UTMA, although the custodian has the responsibility to keep into safekeeping all tax return records on behalf of a minor. 

In cases in which a property has less value, the UTMA becomes more important.  This is likely when a property bond will be ultimately used up by the time a child is of legal age, or when a property is left behind for college costs.  To make this clearer, think about this example.  You might leave behind a $50,000 to your child under the UTMA.  A custodian will be in charge of your child for the remainder of the years under he is of legal age, and in which the actual property will then be awarded to the beneficiary.