Planning for a child’s future often means more than setting aside money in a savings account. Whether you’re a parent, grandparent, or other loved one, you may want to leave assets to a minor, but handing them a lump sum isn’t an option. That’s where a trust comes in. While a minor can’t legally control their own inheritance, a trust gives you a reliable way to manage and protect those funds until they’re old enough to take over. At Palmer & Slay, PLLC, we help families across Mississippi create smart, workable solutions for minor beneficiaries.
Legal Considerations When Naming a Minor Beneficiary
In Mississippi, minors generally can’t own or control significant financial assets. If someone tries to leave money or property to a child without setting up a trust, the courts may step in to appoint a guardian of the estate. This process can cause delays, bring added expense, and create unwanted court involvement.
Instead, a trust for the minor puts a plan in place that avoids these issues. You decide how the assets are managed, who’s in charge, and when the beneficiary receives access. A trust keeps things out of probate court and offers more control over timing and use.
We often recommend trusts for clients who want to:
- Leave inheritance money to a child or grandchild
- Provide support for a minor’s education or health needs
- Delay access to funds until the child reaches a more mature age
Types of Trusts Suitable for Minors
There are several types of trusts that work well when minors are involved. The right one depends on your specific goals. A few common options include:
- Revocable Living Trust: You can make changes to this trust during your lifetime. It helps avoid probate and allows you to direct how and when assets are distributed.
- Testamentary Trust: This type of trust is created through your will and goes into effect only after you pass away. It’s often used to hold inheritance for young children.
- UTMA (Uniform Transfers to Minors Act) Account: This is a simple custodial account that can hold gifts for a minor until they reach the age of majority. It’s not as flexible as a full trust, but it can be useful for smaller amounts.
- Educational or Spendthrift Trusts: These trusts limit how funds can be used. For example, you might allow withdrawals only for tuition or basic living expenses.
Each type of trust can be tailored to suit your wishes and the needs of your minor beneficiary.
The Role of the Trustee or Guardian
Every trust needs a trustee—the person or institution that manages the assets until the minor reaches the age you’ve set for distribution. The trustee has a legal duty to act in the beneficiary’s best interests and follow the instructions in the trust document.
This role is different from a legal guardian, who has authority over a child’s day-to-day life. A trustee handles the money. In some cases, the trustee and guardian may be the same person, but they don’t have to be.
Choosing the right trustee is important. You’ll want someone who is:
- Financially responsible
- Familiar with your family’s needs
- Willing to follow your instructions carefully
What Happens When the Minor Reaches Adulthood
Most trusts are set up to transfer assets when the beneficiary becomes a legal adult. But that doesn’t mean everything has to be handed over at once.
You can set up your trust to:
- Distribute funds in stages (for example, one-third at 21, another third at 25, and the rest at 30)
- Restrict access to certain types of expenses (such as education or medical bills)
- Keep the trust in place longer with a trustee continuing to manage the funds
This flexibility helps protect young adults from making hasty financial decisions and keeps the inheritance working for them over time.
Planning Ahead for a Minor’s Future
Minors can absolutely be beneficiaries of a trust—and in many cases, it’s the best way to secure their financial future. With the right structure in place, you can rest easier knowing your child or grandchild will be taken care of in a way that reflects your values and goals. If you’d like help creating a trust for a minor beneficiary, we’re here to guide you. Contact Palmer & Slay, PLLC, to get started.