What is a custodianship, and how can it be used for minor beneficiaries when implementing an Orange County estate plan? A custodianship is often an excellent alternative to appointing a guardian formally when a minor stands to inherit property during an Orange County estate administration. Custodianships are governed by California’s Uniform Transfers to Minor Act. A custodianship is a legal arrangement in which an adult custodian holds property inherited by a minor for that child’s benefit. The custodian is in charge of managing and utilizing the property for the benefit of the minor beneficiary. Once the child reaches age 18, the property is then transferred to the beneficiary.
Advantages of having a custodianship rather than a formal guardianship appointment include:
- If the will or trust of the decedent calls for the creation of a custodianship, it is very easy to set up. Banks are well versed in this process.
- Unlike a formal guardianship, court supervision is not required over the custodian.
- Custodians are not required to provide annual accountings of the assets to the beneficiary.
- Obtaining a formal guardianship is a much more burdensome process, involving petitions to the probate court and notice to the child’s relatives.
As you implement an estate plan in Orange County, it is important to be aware of your options when it comes to distributing property to minor beneficiaries. Custodianships may be a less burdensome alternative to obtaining a formal guardianship appointment. Be aware, however, that each custodial account that is created may only have one beneficiary and one custodian. If there are multiple minor beneficiaries of the trust or estate, each child will need his or her own separate account
What is a custodianship, and how can it be used for minor beneficiaries when implementing an Orange County estate plan?Handling estates that involve minor beneficiaries comes with unique issues that must be carefully addressed. Fortunately, you do not have to navigate the Orange County estate administration process alone. Call our office today at (714) 282-7488 for a consultation.