Minors can’t directly receive gifts or inheritance in Minnesota. Instead, the gift or inheritance must be held in custody or in trust for the benefit of the minor.
Typical ways to manage the inherited asset or gift for the minor are as follows:
- Trust. If the parent created a trust, the trustee will manage the inherited asset or gift for the minor. This is often the best method because the parents can specify the age or ages at which their children will get control of their trust assets, which usually is later than 18, the age of majority in Minnesota.
- Uniform Transfers to Minors Act (UTMA) custodial account. Minnesota parents can designate an UTMA custodian in their Will to handle assets, including real property, for the benefit of their minor children. If the assets were transferred by Will, Trust or irrevocable gift, the child gets control of the assets, under Minnesota law, upon reaching the age of 21. If the personal representative or conservator makes the transfer without specific authorization in the Will or Trust, the minor gets control of the assets at age 18. Because a child receives lump sum access at a relatively young age under UTMA, a trust is a better choice for large amounts of money.
- Conservatorship. Minnesota parents could nominate a conservator in their Will. Minnesota courts have the final say-so on who becomes a conservator, and there is a statutory priority list on who may be appointed conservator by the court. The conservatorship ends at age 18, which means that the child receives control of all of his or her assets held by the conservator at that age. The appointment of an UTMA custodian in the Will may eliminate the need for a conservator.
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