When preparing your estate plan, it is hard not to want to include those little grandchildren or nieces and nephews.However, be aware that for bequests in excess of $15,000, a guardianship would need to be established to provide those generous gifts to your minor loved ones. The fees for the guardianship could diminish the intentions of your gift substantially.

When leaving anything to a minor, always be certain to add language to the bequest, "Uniform Transfers To Minors Act", commonly known in the legal community as UTTMA.

The Uniform Transfers To Minors Act (UTTMA) provides a mechanism under which gifts can be made to a minor without requiring the presence of an appointed guardian for the minor, and which satisfies the Internal Revenue Service requirements for qualifying a gift of up to $15,000 for exclusion from the gift tax. It is an extension of the Uniform Gifts to Minors Act (UGMA).

The Act allows the donor of the gift to transfer title to a custodian who will manage and invest the property until the minor reaches a certain age. The age is generally 21, but is different in some states (usually 18 in those cases) In the interim, the custodian can also make payments for the benefit of the minor out of the corpus of the gift.

The value of custodianship property is included in a donor's gross estate if the donor dies while serving as the custodian, because the donor's powers are deemed to be retained powers over the gifted property.

If you have any questions regarding this article or any other estate plan matters, please contact Estate Planning paralegal, Debbie Murphy (ext.8) or Attorney Trent Steele (ext.4).