Inheriting Property in California: Can Minors Legally Receive Assets?

As a parent, you want to ensure that your children are well taken care of even after you pass away. 

One way to do this is by leaving them with property or assets that they can  inherit. 

But when it comes to estate planning, many questions arise regarding the legalities of leaving assets to minors. 

Is it possible to leave property to your minor children or grandchildren? Are there specific laws that could stop you from doing so? 

Let’s take a closer look.

How To Leave A Minor With Assets?

It's instinctive to prioritize the well-being of your children or grandchildren even after you're gone. 

Estate planning allows you to make crucial decisions regarding who will inherit your assets, including minors. 

But it’s important to understand the legal complexities involved in leaving property.

Under California law, minors are not legally allowed to own or manage property until they reach the age of 18. 

This means that if you want to leave property to a minor, there must be a plan in place for managing and safeguarding these assets until they reach the age of majority.

There are two main ways to leave property to a minor: through a guardianship or through a trust.

Establishing a Trust: Security for Your Child’s Inheritance

Parents often secure their child's financial future by setting up a trust. This includes appointing a successor trustee – a person chosen to look after the trust's money carefully and lawfully.

When the child matures, typically at 18 or another age pre-decided by the parents, they will receive any money that's left in the trust. 

What happens if a trust wasn't created? 

In such cases, the court might step in and set up what's known as a guardianship for the estate. 

This means an adult, supervised by the court, will take care of the inheritance money for the child. If there's a surviving parent, they can ask the court to let them manage this guardianship, but they’ll have to prove they're doing a good job by regularly reporting back on their management.

Streamlining Inheritances: The California UTMA Advantage

California offers a unique law named the Uniform Transfers to Minors Act (UTMA) that allows a minor to receive money without the formal setup of a trust or guardianship. 

A trusted custodian is tasked with managing the inheritance money until the minor becomes an adult. 

An efficient alternative that not only is easier to set up but also potentially reduces taxes on the inheritance. The only catch is that the money received through UTMA cannot be controlled by conditions and must be given outright when the minor is no longer a minor.

It’s important to note that if an inheritance exceeds $5,000 in value, then it must go through probate court before it can be distributed to a minor beneficiary. The court will appoint a guardian ad litem who will represent the interests of the minor during any legal proceeding.

Working with an experienced estate planning attorney is beneficial. They can help you create an estate plan that meets your needs and ensures that your minor child is taken care of after your death. 

Need help with estate planning? Contact our office today!

DISCLAIMER: The content contained herein is for general informational purposes only.  These materials do not constitute legal or other professional advice.  We do not accept any responsibility for any loss that may arise from reliance on this information.  No reader should act or refrain from acting based on information contained in this article without seeking advice of counsel.