| One problem many of our clients face is leaving property to young children. San Diego Business Law takes into consideration quite a few things when helping parents out with this problem. Who will raise your child and will they have enough money to do so? If you don’t arrange property management of you children under 18, the probate court will name someone to serve as the children’s “property guardian” for you. Unless you specify it in your will, your children above 18 will have complete control of the property they inherit. The four most simple ways to arrange your children’s inheritance are as follows
1. Name a Custodian Under the Uniform Transfers to Minors Act
This law has been adopted in substantially the same form in almost every state. (The holdouts are South Carolina and Vermont.) Under the UTMA, you may choose someone to manage property you are leaving to a child. This person is called a custodian. If you die when the child is still under the age set by your state's law -- 21, in most states -- the custodian will step in to manage the property. (Older offspring get their property outright.)
To set up a custodianship, all you need to do is name a custodian and the property you're leaving to a young person. You can do this in your will or living trust, or when you name a beneficiary for an insurance policy, if you're leaving life insurance proceeds to your kids. For example, your will might state, "I leave $10,000 to George Smith, as custodian for Sue Jones under the Illinois Uniform Transfers to Minors Act." That would be enough to create the custodianship if it's ever needed. The age your children will receive the property depends on your state and can range from 18 to 25.
2. Set Up a Trust for Each Child
Another approach is to establish a trust for each child. With this arrangement, you use your will or living trust to name a trustee (usually a trusted relative or friend), who will handle money or property the child inherits until the child reaches the age you specify. If the beneficiary is already over this age at your death, the trust never comes into being; instead, the property goes straight to the beneficiary.
The trustee must act in the beneficiary's best interests and follow your written instructions. Generally, the trustee can spend trust money for the young person's health, education and living expenses. When the child reaches the age you specified, the trustee ends the trust and gives whatever is left of the trust property to the beneficiary.
Serving as a trustee is more work than is serving as a custodian under the UTMA. For one thing, a trustee must file annual income tax returns for the trust. And because the powers of a trustee are limited to what's allowed in the will or trust document, the trustee may have to show the will (or at least the part of it that outlines the trustee's authority) to banks and others with whom he or she deals. The powers of an UTMA custodian, however, are set out by state statute. Most banks and other institutions are familiar with them and know just what authority custodians have.
3. Set Up a "Pot Trust" for Your Children
If you have young children, you may want to set up just one trust for all of them. This arrangement is often called a pot or family trust. In your will or living trust, you authorize the trust and appoint a trustee, who will have the power to dole out trust money to each of the children. The trustee doesn't have to spend the same amount on each child; instead, the trustee decides what each child needs. When the youngest child reaches a certain age, usually 18, the trust ends.
A pot trust provides great flexibility for the trustee. Its major drawback is that the older children can't receive their shares of the trust property until the youngest child turns 18; they may not get control over their inheritance until they are well into adulthood.
4. Name a Property Guardian
If you wish, you can simply use your will to name a property guardian for your child. Then, if at your death your child needs the guardian, the court will appoint the person you chose. The property guardian will manage whatever property the child inherits, from you or others, if there's no mechanism (a trust, for example) to handle it.
Living Wills and Trusts - Overview
Living Wills and Trusts - Estate Executor
Living Wills and Trusts - Right to Inheret
Living Wills and Trusts - Preparing for the Worst
Living Wills and Trusts - Multiple Benefeciaries | 
