Creating a 2503(c) Minor's Trust

Trust Attorney Serving Los Angeles

Are you looking for a trust to place money in for your child or children's future? A 2503(c) minor's trust might be a great financial option that can be explained by a Los Angeles trust attorney from out firm. It is a separate legal entity that was established to hold gifts in the trust for the child until the age of 21. It was named after a section of the Internal Revenue Code from which it was based. It is a trust with only one beneficiary, who is the minor under the age of 21. When the trust reaches its majority, the minor will have full use and control of the assets.

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Requirements for the Trust

It is important to note that the grantor of the trust is not able to receive any income from the assets which are held in the trust. These gifts will no longer qualify for annual exclusion after the beneficiary turns 21, unless he or she has the immediate right to withdraw the gifts. There are specific requirements for the 2503(c) minor's trust, which are:

  • The assets in the trust can be expended for the benefit of the child before the age of 21
  • If the child dies before the age of 21, the trust will be included in the child's estate
  • All undistributed assets must be distributed prior to the child's 21st birthday
  • Gifts to the 2503(c) minor's trust are irrevocable

Many times, the gifts included in the 2503(c) minor's trust are used to pay college expenses for that child. After the child turns 21, gifts can still be made to the trust, but they will not be qualified for the gift tax exclusion. If you are pursuing a 2503(c) minor's trust for your child's benefit, a Los Angeles trust lawyer from our firm can provide you with all the necessary information. Contact the Law Offices of David A. Shapiro, P.C. today for our guidance!

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