Trust For A Child

Routinely, when people have wills drafted, they have concerns as to how the inheritance would be spent by children or family members with special physical or mental health needs.  Would the beneficiary use the money for their education or maintenance or, would the money be squandered on a bad influence or hot rod?

In 1989, the Maryland legislature enacted the Transfers to Minors Act. This Act permits the transfer of gifts to minor children or persons suffering from a disability.  Gifts may include cash, stocks, bonds, real property, jewelry, valuable family heirlooms or, even partnership interests.  The Act provides a method of retaining funds and prevents distribution to the beneficiary before they are able to manage it themselves responsibly.

A transfer to a child or disabled person under the Act requires the involvement of a trustee.  This is an adult who will manage the property until the child reaches the age designated by the donor, usually twenty-one, or the person has recovered from the disability.  The custodian manages the property for the beneficiary.  He or she decides matters relating to preserving and investing the property, such as the family home or life insurance proceeds.  The custodian may also take money from the account to spend for the benefit of the beneficiary.  When the child reaches the age designated in the trust for distribution, the custodian transfers the property to the child.  At that time, the child may then use it in any way he or she chooses.

Generally the above provisions of the Maryland Uniform Transfers to Minors Act are incorporated into each of the parent=s will.  Additional information regarding the Act is available at the local law library.  See MD. Code Ann. Est. & Trusts '13-301 to 13-324. Alternately, you may call me with questions on this or any other legal matter at (301) 290-1400 or e-mail me at strissel@aol.com.

This column is general in nature.  It=s accurate and hopefully helpful, but it=s not meant to be legal advice.  No attorney can give you good advice without knowing the details of your individual situation.  No attorney-client relationship is created until all parties have explicitly agreed.