Can I Name a Minor Child as Beneficiary

Glenn just received a heartbreaking notification – his mother’s codicil, intended to leave him and his 12-year-old daughter, Emily, a significant inheritance, was deemed invalid due to improper witnessing. The estate will now be distributed according to the original Will, leaving Emily with nothing. This oversight cost Glenn’s family over $250,000 in lost assets and needless legal fees.

As an estate planning attorney and CPA with over 35 years of experience, I’ve seen this scenario play out far too often. While naming a minor child as a beneficiary is perfectly permissible, it’s rarely the most practical approach. Directly naming a minor as a beneficiary creates significant legal and logistical hurdles. Because a minor lacks the legal capacity to manage assets, the inheritance won’t be distributed to them directly. Instead, the court will likely appoint a guardian ad litem to manage the funds on Emily’s behalf, a process that can be expensive, time-consuming, and subject to court oversight. This process also delays access to those funds, which can be critical in times of need.

What Happens When a Minor Inherits Assets Directly?

Typically, the court will oversee the funds until the child reaches the age of 18. However, 18 isn’t always the right age to receive a large sum of money. The minor may lack the maturity or financial knowledge to handle it responsibly. This guardianship requires ongoing court filings, accountings, and approvals for any expenditure, adding substantial administrative burden and costs. Further complicating matters, once the child reaches 18, the guardian’s responsibility ends, and the full inheritance is immediately transferred – regardless of their preparedness.

How Can I Ensure My Child Receives the Inheritance Safely and Wisely?

Establishing a trust is the preferred method for leaving assets to a minor. A trust allows you to control when and how the assets are distributed, even after your passing. You designate a trustee – someone you trust implicitly – to manage the funds according to your specific instructions. This trustee can distribute the assets over time, for specific purposes (education, healthcare, living expenses), or upon reaching certain milestones. This offers far greater control and protection than a direct inheritance. Furthermore, the trustee can leverage my expertise as a CPA to minimize tax implications. The step-up in basis available on inherited assets can significantly reduce capital gains taxes, and proper valuation of business interests or real estate ensures compliance and maximizes benefits.

What Considerations Should I Keep in Mind When Choosing a Trustee?

Selecting the right trustee is paramount. Look for someone responsible, financially astute, and aligned with your values. Consider their relationship with the beneficiary, their understanding of financial matters, and their willingness to adhere to your instructions. Also, think about potential conflicts of interest. It’s crucial to discuss trustee responsibilities and compensation thoroughly. If the inheritance includes a business, the trustee must understand the intricacies of LLC ownership as of January 1, 2026, non-exempt LLCs must comply with FinCEN’s Beneficial Ownership Information (BOI) reporting; executors and beneficiaries managing inherited entities must file updated reports within 30 days of ownership changes to avoid significant civil penalties.

How Does This Apply to Digital Assets and Government Benefits?

Don’t overlook digital assets. Under California’s RUFADAA (Probate Code § 870), beneficiaries and executors are legally barred from accessing digital accounts, photos, and crypto-wallets unless the decedent explicitly granted authority in their Will, Trust, or via an ‘online tool’. The trust document should explicitly address access and management of these accounts. Finally, be aware that an inheritance could jeopardize government benefits. Effective January 1, 2026, California has reinstated asset limits ($130,000 for individuals) for non-MAGI Medi-Cal programs, meaning an inheritance could immediately disqualify a beneficiary from aged or disabled aid. Assets without valid beneficiaries may trigger probate if the total value of personal property exceeds $208,850 (for deaths occurring on or after April 1, 2025); a Will alone does not bypass this limit. For deaths on or after April 1, 2025, a primary residence worth $750,000 or less (gross value) may qualify for a simplified transfer under AB 2016 (Probate Code § 13151), bypassing formal probate.

How do probate courts in California evaluate intent when a will is challenged?

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.

To ensure the will functions as intended, the executor must understand their fiduciary obligations, while the family should be prepared for the probate process required to enforce the document.

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.

Official Resources for Probate, Legal Standards, and Tax Rules

• Probate / Beneficiaries:
  San Diego Superior Court – Probate Division:
  Provides essential Escondido-specific “Local Rules” (Division IV) and forms effective January 1, 2026, including Rule 4.4.5 for remote appearances, mandatory e-filing protocols for Escondido County, and the calendar for the Central Courthouse.
• Legal Standards:
  State Bar of California:
  The official regulatory agency for California’s 270,000+ attorneys; use this portal to verify a lawyer’s license status, check for a history of disciplinary actions, and access the 2026 guidelines for ethical attorney-client fee agreements.
• Tax / Estate Tax:
  IRS Estate Tax Guidelines:
  The authoritative federal resource for estate and gift tax filing; this page reflects the 2026 “OBBBA” permanent exemption of $15 million per individual, which replaced the scheduled 2026 “tax cliff” from previous legislation.
• Self-Help / Forms:
  California Courts – Wills, Estates, and Probate:
  The Judicial Council’s primary self-help center offering standardized forms for 2026, including the updated $208,850 “Small Estate Affidavit” and the $750,000 “Primary Residence” simplified transfer procedure (AB 2016).