A minor beneficiary can be named in a Will or a Trust or, by default, be entitled to an inheritance through intestate succession. However, in California, a minor cannot legally own property until they are 18 years of age and must wait until the age of majority to take possession of it.
In California, what happens to a minor’s inheritance depends on the value of the inheritance.
A. If a minor child inherits $5,000 or less and the minor child does not have a guardian of the estate, money or other property belonging to the minor child may be paid or delivered to a parent of the minor child entitled to the custody of the minor to be held in trust for the minor until the minor reaches majority conditional upon the parent giving the person making the payment or delivery written assurance, verified by the oath of the parent, that the total estate of the minor child, including the money or other property to be paid or delivered to the parent, does not exceed $5,000.On the date the minor turns 18, the minor child is entitled to an accounting of the money held in trust for that minor’s benefit.
B. In the event the minor child inherits in excess of $5,000. A court proceeding is required unless a trust had been arranged by the deceased person for the money to go into a trust.In the event a guardianship of the estate has been created for the minor, the money can be held in the guardianship.
In the event of no trust or guardianship, a person holding the money for the minor can file a petition in Superior Court. The Court may allow the petitioner to invest the money to pay for the minor’s education, or some other specific purpose. If the minor inherits $20,000 or less, the Court can order the money be held in whatever way the Court decides is best for the child.
C. If your child inherits more than $20,000, the Court can order that:
- A guardianship shall be created and the money turned over to the guardian;
- The money shall be invested with the County Treasurer;
- The money shall be deposited in a blocked account, or a single premium deferred annuity, with withdrawal only allowed by Court order;
- All or part of the money must be turned over to a custodian under the California Uniform Transfers to Minors Act. The Uniform Transfers to Minors Act (UTMA) allows a minor to receive money without the aid of a guardian or trustee. A UTMA account allows the appointed custodian to manage the minor’s account until the latter is of age. UTMA also shields the minor from tax consequences on the gifts, up to a specified value.
If the estate of a decedent who died on or before December 31, 2019 is over $150,000 it will likely require a formal probate procedure. If the estate of a decedent who died after December 31, 2019 is over $166,250 it will likely require a formal probate procedure. In that event, the court appointed personal representative of the estate must adhere to specific rules, including rules regarding distribution to minors. If you need the general assistance of a California probate lawyer, please contact me for a free consultation. You can reach me by phone at (760) 989-4820, by email at [email protected] or through my online contact form.
From my office in Southern California, I represent families in all California counties, including Southern California Counties such as Imperial County, Los Angeles County, San Bernardino County, and San Diego County. I also represent parties residing outside of California that have probate matters affecting real and/or personal property in California.
Disclaimer: This article is intended to provide general information. The content of this publication is for informational purposes only. Neither this publication nor its author is rendering legal or other professional advice or opinions on specific facts or matters. No attorney-client relationship is created by this advisory, nor by any response to the information herein, unless and until a conflicts review has been conducted by William K. Sweeney, and a written agreement containing all terms of representation has been signed.
Copyright © 2019, William K. Sweeney, Attorney at Law. All rights reserved.