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What kind of UTMA or Trust can an Executor set up for a minor heir till they are 25

This legal question related to Trust & living in MentorOhio has been answered.

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Location: Mentor  |  Law type: Trust & living
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As executor of an estate with a will (no other estate planning) in probate, what type of UTMA or Trust can I set up for the two children?  At the time their father died (he had full custody, mother abandon her children 4 years prior) his son was 17, his daughter 15, they are now 19 & 17.  What type of account can be set up for their inheritance of approximately $50k each to protect it till they are older & more mature, perhaps 21 or 25 years old?  Or are there any other options?  

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Legal Solution

The response provided below is specific to Trust & living in the jurisdiction of Mentor. If the response is inadequate, please submit a detailed inquiry.

Establishing Trusts for Minor Heirs: A Guide for Executors in Mentor

As the executor of an estate in Mentor, you have the fiduciary responsibility to ensure the inheritance of minor heirs is protected and managed appropriately until they reach an age of financial maturity. Given the information provided and the inheritance amounts, you have multiple options to consider, primarily the use of a Uniform Transfers to Minors Act (UTMA) account or a Trust.

Relevant Legal Provisions:

Solutions:

  1. UTMA Accounts: An account under UTMA allows you to place funds in a custodial account for the benefit of the minor. When the minor reaches the age of majority (usually 18 or 21, depending on state laws), they gain control of the account. However, if you feel the age of majority is too young for the heirs, this may not be the ideal solution.

  2. Establishing a Trust: A more flexible option is to establish a trust for the benefit of the minors. With a trust, you can:

    • Determine the age at which they receive the inheritance (e.g., 25).
    • Designate a trusted individual or institution as the trustee to manage and distribute the funds according to the trust's terms.
    • Incorporate specific stipulations for disbursements, such as educational expenses or home purchases.

    For more guidance on setting up trusts, you may want to compare lawyers in your area specializing in estate planning or trust establishment.

Cost Analysis for Legal Services in Mentor:

Service Average Price
Consultation with Probate Lawyers $275
Drafting a Simple Trust $1,500
UTMA Account Establishment $300
Ongoing Trust Management (annual) $750
Complex Trust with Stipulations $2,800

Please note that prices can vary based on the lawyer's experience, the complexity of the estate, and other factors. It's essential to get multiple quotes to ensure competitive pricing.

Seeking Further Clarification:

To provide a tailored solution that best serves the interests of the minors, additional details about the estate, the minors, and their needs would be beneficial. It's always recommended to consult directly with an attorney to explore the best options for your unique situation. You can find the right lawyer to assist you with this matter.

Relevant Questions to Answer:

  1. Nature of the Estate: What other assets, if any, does the estate consist of? This can determine the complexity of the trust and its management.
  2. Needs of the Minors: Are there immediate financial needs for the minors, such as educational expenses or healthcare?
  3. Other Beneficiaries: Are there any other beneficiaries mentioned in the will? Their existence might influence the distribution process.

Q1: Can I change the terms of a trust once it's established?

No, unless it's a revocable trust. Once an irrevocable trust is set up, its terms cannot be altered unless under very specific conditions, usually requiring the consent of all beneficiaries and possibly court intervention.

Q2: What are the tax implications for trusts?

Trusts can have various tax implications. Generally, trusts are separate taxable entities and might be subject to income tax. The specifics depend on the type of trust, its terms, and other factors. It's always recommended to consult with a tax professional.

Q3: How is an UTMA account different from a trust?

An UTMA account is a simpler form of holding assets for a minor until they reach a specific age. Trusts, however, offer more flexibility in terms of control, distribution stipulations, and the age at which the beneficiary can access the funds.

Q4: Who can serve as a trustee?

Almost anyone can serve as a trustee, including individuals, banks, or trust companies. It's crucial to select someone trustworthy, competent, and preferably with knowledge of financial matters.

Q5: What if the minors need access to the funds before the age specified in the trust?

This is dependent on the terms set in the trust. Some trusts allow for disbursements for specific reasons (education, medical emergencies) before the age set for full access.

Disclaimer

This content is for informational purposes only and does not establish an attorney-client relationship. It's always recommended to consult with a local attorney about your specific situation.

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Legal question "What kind of UTMA or Trust can an Executor set up for a minor heir till they are 25" has been changed 8 months ago. Demonstrate your legal skills and willingness to help and answer right now! Issue is related to the location of Mentor & area of law: Trust & living.
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