Leaving a Bank Account to a Grandchild to Age 25
This edition of the Koldin Report E-Newsletter is part of a series on questions we received from our “contact us” form on our website about Elder Law, Estate Planning and Medicaid.
All prior newsletters are saved on our website. You can read them by clicking here.
In this newsletter we answer the following question posed by a visitor to our website:
Can a bank account be set up for a grandchild where the grandchild cannot have the funds until reaching an age such as 25?
You can set up a bank account and designate your grandchild as a beneficiary on your account. Some example account designations are:
“Tom Jones P.O.D. Daniel Jones” (Payable on Death)
“Tom Jones T.O.D. Daniel Jones” (Transfer on Death)
“Tom Jones I.T.F. Daniel Jones” (In Trust For)
If your grandchild is under the age of 18 at the time of your death, the bank will likely turn the account over to a custodian to hold the funds pursuant to the Uniform Transfers to Minors Act (UTMA) until the child reaches age 18. Some banks may permit you to raise the age to 21.
You can also gift funds to your grandchild now and name yourself or someone else as custodian to age 21.
If you desire the grandchild to receive the funds later than age 21, such as age 25, then you can leave your grandchild a bequest in your Will or Living Trust that directs the grandchild’s share to be held in a Trust.
Unlike an account created under the Uniform Transfers to Minors Act (UTMA Account) which must be turned over to the child at age 18 or 21, with a Trust, you can set any age you wish for when the funds must be turned over to your grandchild.
Also, with a UTMA account, you can only appoint one custodian to manage the funds. With a Trust, you can appoint multiple Trustees and Successor Trustees.
Also, with a Trust, you can restrict when funds may be spent on your grandchild. For example, you could limit distributions to education expenses.
For more information about Beneficiary Trusts, please see our website by clicking here.
At the Koldin Law Center, P.C.,, located in East Syracuse, New York, we have over 50 years of experience helping individuals plan for immediate crisis and long term care. Our attorneys are available to discuss your estate planning options, including the advantages and disadvantages of Revocable Trusts and Irrevocable Trusts, along with other estate planning considerations including a Will, Power of Attorney, and Health Care Proxy. We do not charge a fee for the initial consultation. We welcome your children, family attorney, accountant, and/or financial planner to be present at the initial consultation.
There is something you can do.
Our Attorneys are available to speak to your organization
Our Attorneys speak to groups throughout New York State as a public service. If you would like to arrange for one of our Attorneys to speak to your group, please contact our office.
We appreciate your referrals
We have been told by many clients who are in a crisis that they wish they had known about our firm much sooner. We are proud of the many families we have helped in times of crisis.
We are also proud of the many families we helped avoid financial crisis by doing estate planning in advance.
We all share the responsibility for making our family and friends aware of the planning options available to them.
Your referral to the could make a major difference in the lives of your family and friends if they are someday faced with a long term illness.
Remember that the offers many services for clients of all ages. Our services range from basic estate planning such as a simple will to complex estate planning including asset preservation planning.
THERE IS NO FEE FOR THE INITIAL CONSULTATION
