Transferring Money to Minors: The problem for many parents in finalizing their estate plan is deciding how to provide for minor children. Let’s face it, most teenagers may not be responsible enough to manage a substantial amount of money that could be left to them. More disconcerting is the situation with children of an even younger age. A revocable living trust is an ideal solution to these types of problems. A trust enables the parents to nominate a person to be in charge of the funds, specify how the funds are to be used and when the children can be distributed funds without any further restrictions.
However, a trust is not the only method to accomplish these goals. Nevada’s Uniform Act on Transfers to Minors enables you to bequeath assets to a custodian for any minor children subject to the following restrictions: you must nominate a custodian; and, the distribution cannot be delayed beyond the minor turning 25. Upon the occurrence of an event resulting in the custodian receiving the property, the custodian may deliver or pay to the minor or expend for the minor’s benefit so much of the custodial property as the custodian considers advisable for the use and benefit of the minor without a court order. If the custodian fails to exercise this right, upon a petition by an interested person, or the minor (if the minor has attained the age of 14 years), the court may order the custodian to deliver or pay to the minor or expend for the benefit of the minor so much of the custodial property as the court considers advisable for the use and benefit of the minor.
There are advantages to both methods but you should also be aware of the potential problems before making a decision as to the best solution.