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Inheritance To Minors - Restricted Accounts

If you want to leave and inheritance to a minor beneficiary, and the amount of that inheritance is not too substantial, a good idea would be to leave the assets in a restricted account. This way you can leave those assets to be held for their benefit until they become and adult.

These restricted accounts may include Uniform Transfers to Minor Act or Uniform Gifts to Minors Act accounts established under applicable state law. These accounts can be used to pay for education, medical, and other living expenses until the minor reaches the age of 18 or 21. The age of termination is dependent upon the laws of the state, in California the age is 18, however you can specify up to the later age of 21 if you wish to do so. Another option is using a 529 account, which can only be used to pay for the minor's education.

The major drawback to using UTMA or UGMA accounts is that once they terminate upon the specified age of the beneficiary, they receive the full amount without any attachments or restrictions. And as for 529 accounts, if the beneficiary decides not to go to college then the plan will have to go to somebody else.

For help on setting up restricted accounts for minor beneficiaries, contact a professional estate litigation Attorney.

*This blog entry was not written by an Attorney and should not be constituted as professional legal advice.