Many people wait until retirement to think about estate planning, but creating a will is just as important for younger adults, especially parents with minor children. A valid, up-to-date will not only directs how your assets are distributed, but more importantly, it allows you to name a guardian for your children and a trustee to manage their inheritance.
When drafting a will in Texas, it’s common to name children, grandchildren, or other minors as beneficiaries. But what happens if one of those beneficiaries is still a minor? Texas law has specific strict protections to ensure that minors cannot directly manage inherited assets. There must be several legal safeguards that ensure a minor’s inheritance is properly managed until they reach adulthood.
What Happens When a Minor Is Named in a Will in Texas?
Can Minors Inherit Assets?
Minors in Texas can be named in a will, but they cannot legally receive or manage assets until they reach 18 years of age. That means someone else must be appointed to manage the inheritance on their behalf.
Managing a Minor’s Inheritance.
1. Guardian of the Estate Appointed By The Court
A Guardian is the person that is appointed to take care of any minor children in a Last Will and Testament if both parents are deceased. If your will doesn’t specify how a minor’s inheritance should be handled, the court will appoint a guardian of the estate. This person will be responsible for managing the minor’s assets until they turn 18. This process is often time-consuming and can involve regular court supervision and reporting.
In order to for someone to legally become the guardian of a minor, they must go to Court and begin the guardianship proceedings. Once appointed, the guardian can make decisions on their behalf regarding medical needs, schooling, etc.
2. Trusts Created for Minors
A more flexible option is creating a trust. If your will sets up a testamentary trust or references an existing trust, a trustee will manage the funds according to the terms you specify such as using the money for education or delaying access to the funds until the minor is older. This makes it easy to avoid the court-appointed guardian process, which can require considerable time and money, it is more efficient to leave behind assets in a trust.
If a minor inherits assets from a trust, the trustee distributes funds according to the instructions the decedent laid out. These instructions can be as tailored and specific as you want them to be, and they can allow your minor child to continue to benefit from your estate in a responsible, efficient way.
3. Texas Uniform Transfers to Minors Act (UTMA)
The term Uniform Transfers to Minors Act (UTMA) refers to a law that allows a minor to receive gifts without the aid of a guardian or trustee. Gifts can include money, patents, royalties, real estate, and fine art.
Texas law allows you to transfer assets under the UTMA, naming a custodian to manage the inheritance until the child turns 21 or 25 if specified. This avoids probate court but doesn’t offer as much control as a trust. This is a simpler and less costly alternative to setting up a formal trust, but it offers less control over how the funds are used. By using a trust or UTMA account, you maintain control over how and when a child receives their inheritance.
What Happens When You Don’t Plan Ahead
Failing to plan properly can lead to:
- Court involvement and extra legal costs
- Limited flexibility for using funds
- Unrestricted access to assets at age 18
Final Thoughts On What Happens When a Minor Is Named in a Will in Texas?
Naming a minor in a Texas will is completely legal, but it requires careful planning. Use tools like trusts or UTMA accounts to protect your legacy and provide for the child’s future responsibly.
Contact Us
Get in touch with The Law Office Of Udo Ezeamama, our experienced estate planning attorneys will ensure your wishes are carried out without unnecessary legal complications. We pride ourselves not only on our professionalism, but also upon our client service. We know that each situation is unique and we keep our clients well informed as to the status of their case.