Best Way to Leave Money to a Minor

Emily just called, absolutely devastated. Her father passed away unexpectedly, and while he thought he’d updated his Will to include a small inheritance for her 16-year-old niece, Lily, he used a handwritten codicil – a simple addition to the original document. Unfortunately, the codicil wasn’t properly witnessed, making it invalid. Now, the $25,000 meant for Lily’s college fund is tangled up in probate, costing Emily’s family thousands in legal fees and delaying access to the funds Lily desperately needs. This scenario, sadly, is far too common. Leaving money to a minor requires careful planning, and a simple oversight can create a nightmare for your loved ones.

As an Estate Planning Attorney and CPA with over 35 years of experience here in Escondido, I’ve seen firsthand how crucial it is to address this issue proactively. Many people assume a Will is enough, but when a minor is involved, the complexities increase significantly. The key is understanding that a minor cannot legally own property directly. This is where proper estate planning comes in. The most common methods are Trusts, Guardianships, and UTMA/UGMA accounts, each with its own advantages and disadvantages.

What are the Options for Leaving Money to a Minor?

Leaving assets directly to a minor, even within a valid Will, creates a legal headache. The court will appoint a Guardian of the Property to manage the funds until the child reaches the age of majority (18 in California). This involves court filings, ongoing reporting, and potentially bond requirements, all adding to the expense and administrative burden. But let’s explore the main options:

• Guardianship: This is the default method if you haven’t planned otherwise. A court-appointed Guardian manages the funds, requiring annual accountings and court approval for expenditures. It’s often the most expensive and least flexible option.
• Uniform Transfers to Minors Act (UTMA) / Uniform Gifts to Minors Act (UGMA): These accounts allow a custodian to manage assets for a minor. They are relatively easy to establish but offer limited investment options and assets must be used for the minor’s benefit.
• Trust: A properly drafted Trust offers the greatest flexibility and control. You can specify when and how the funds are distributed, protecting the assets from creditors and ensuring they are used responsibly.

Why a Trust is Often the Best Solution

While UTMA/UGMA accounts and Guardianships have their place, a Trust is usually the most sophisticated and beneficial way to leave money to a minor. As a CPA, I can tell you that the tax implications alone are often worth the investment in a well-structured Trust. Here’s why:

A Trust allows you to dictate precisely when the funds become available to your child. You can set milestones – college graduation, age 25, purchasing a home – to ensure the money is used wisely. You also retain control over the investment of the funds, maximizing potential growth. Furthermore, a Trust can minimize estate taxes and provide for professional management if you desire.

The flexibility is unparalleled. You can create a “spendthrift” clause protecting the assets from the child’s creditors or irresponsible spending. You can also address potential issues like special needs, ensuring the funds are used to supplement, not replace, government benefits.

But it’s not just about the money. A Trust allows you to leave specific instructions and values to guide your child, offering them support and wisdom long after you’re gone. This can be particularly meaningful during formative years.

What About Mistakes in a Will or Codicil?

Even a seemingly minor error in a Will or codicil can invalidate the entire document. Probate Code § 6110(c)(2) states that the court may validate a signature-defective Will if there is ‘clear and convincing evidence’ of the testator’s intent; however, this requires a costly court petition and is not a guaranteed safety net. This is why meticulous drafting and proper witnessing are paramount. A codicil, in particular, must be executed with the same formalities as the original Will. If it’s not, it’s as if it never existed, as Emily discovered with her father’s Will.

What if I’m Leaving Digital Assets?

Don’t forget about digital assets – online accounts, cryptocurrency, digital photos. These are increasingly valuable and require specific provisions in your estate plan. RUFADAA 2.0 (SB 1458), effective 2025, expands the scope of digital asset access for fiduciaries; however, you must still grant explicit RUFADAA powers in your Will or Trust to bypass federal privacy blocks.

What Happens If a Will is Invalidated?

If a Will is invalidated, assets fall under intestacy; however, for deaths on or after April 1, 2025, estates with personal property under $208,850 (per CPC § 13100) may still bypass full probate via affidavit. However, this smaller threshold doesn’t apply to all assets and still requires court approval. This can be a lengthy and expensive process, potentially depleting the inheritance your child would receive.

The Risks of Beneficiary Witnesses

California Probate Code § 6112 states that an ‘interested witness’ (a beneficiary) triggers a legal presumption of duress or fraud. Unless there are two other disinterested witnesses, the beneficiary may lose their gift, taking only what they would have received under intestacy rules. This means choosing your witnesses carefully is crucial; avoid naming beneficiaries as witnesses to your Will.

Finally, remember that while California allowed temporary remote witnessing during the pandemic, the law (CPC § 6110) has reverted to requiring strict simultaneous presence; remote signatures are generally invalid for Wills unless they meet the narrow ‘Electronic Will’ standards of AB 298.

What does a California probate court look for when interpreting testamentary intent?

In California, a last will and testament is reviewed under probate standards that focus on intent, capacity, and execution. Clear drafting reduces ambiguity, limits misinterpretation, and helps families avoid unnecessary conflict during estate administration.

For California residents, understanding how intent, authority, and compliance interact is one of the most effective ways to protect family harmony and estate integrity. A will that anticipates probate scrutiny is far more likely to be honored as written and far less likely to become the source of unnecessary conflict.

Resources for Legal Standards & Probate Procedure

• Escondido Local Rules: San Diego Superior Court – Probate Division
  Access the essential “Local Rules” (Division IV) effective January 1, 2026. This includes mandatory e-filing procedures, current Probate Examiner notes, and Local Rule 4.4.5 regarding remote appearance requirements (via MS Teams) for non-evidentiary hearings.
• Attorney Verification: State Bar of California
  The official regulatory body for California attorneys. Use this to verify a lawyer’s “Certified Specialist” status in Estate Planning or to access 2026 guidelines on the ethical handling of Client Trust Accounts (IOLTA).
• Self-Help & Forms: California Courts – Wills, Estates, and Probate
  The Judicial Council’s official portal. It includes the updated 2026 forms for the $208,850 personal property threshold and the $750,000 “Primary Residence” simplified transfer procedure (AB 2016).
• Federal Estate Tax: IRS Estate Tax Guidelines
  The authoritative federal resource for estate and gift tax filing. It reflects the 2026 “OBBBA” permanent exemption of $15 million per individual, replacing the previously scheduled Tax Cuts and Jobs Act (TCJA) sunset.