Defining a Child’s Trust
By definition, a child’s trust is a trust that is left to a child upon death, but is managed by the trustee until the child comes of age to inherit. In accordance with Virginia inheritance law, children younger than 18 years of age cannot inherit property that exceeds $2,500-$5,000, dependent upon the type of property inherited. Therefore, your trust must be managed by a third party until your beneficiary is 18 years-old.
Forming a Child’s Trust
When forming the trust, you must designate your trustee and beneficiary. However, you must also include the age at which your beneficiary is able to inherit the trust property. If you fear that your beneficiary is not prepared to inherit the trust at the age of 18, you are able to designate an age of your choosing. This intention must be clearly documented in the trust documents in order to be enforced.
Including untitled property in your child’s trust requires listing the property as trust property. Titled property must have the title ownership transferred to the trust in order to be included. Remember, you are only able to bequeath property that you own outright.
Property Trustee v. Child Guardian
A child’s trust is managed by the trustee until the child is able to inherit the trust property. However, naming the guardian of a minor’s property is not the same as designating a child’s guardian. While you are able to name the same individual for both roles, you must separately designate child guardianship. It is not assumed that the trustee will also care for the child.
In the event that you do not provide a trustee to manage the minor’s estate, the court will appoint an administrator to manage the trust until the child is able to inherit. Alternatively, failing to provide for child guardianship outside of minor property guardianship leaves the court to appoint an appropriate guardian.
Including Property in a Child’s Trust
As with almost all trusts, you must simply list the property to be included as trust property. Untitled property is included as an itemized list, while titled property must have the title ownership transferred to the ownership of the trust.
Keep in mind that property containing specific forms of property, such as a farm or a business, cannot be inherited by minors. This type of property is best bequeathed to another responsible party, or transferred upon death. Remember, estates that claim farmland as an asset cannot avoid probate proceedings on that property.
Adding Property to a Child’s Trust
Property is easily added over the course of your lifetime. For untitled property, you must amend the list of trust property to include your acquired property. For titled property, you must change title ownership of the property and include it in your amended trust property list. Only include property that you outright own.
Property that you acquire but do not adequately include in your child’s trust is subject to probate and intestate succession proceedings. Therefore, it is important that you accurately transfer all of your intended property into the trust.
Establishing a child’s trust is the responsible method of bequeathing your estate to a minor. However, it takes careful planning and precision in order to be deemed valid. Schedule a consultation with our estate planning attorney in order to form your air-tight child’s trust.