Not everyone in Nevada takes the proper steps to ensure that an estate plan is correct, if one even exists. In these instances, it is entirely possible that a minor child could end up inheriting property.
While there is nothing wrong with a minor receiving an inheritance, he or she cannot take possession or control of it before reaching adulthood. Therefore, it is often up to the executor of the estate to figure out what to do with it under these circumstances.
What options do you have?
As you attempt to determine what to do with a minor’s inheritance, you could look to the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act for guidance. If the inheritance is worth no more than $20,000, you could put it into a UGMA account that holds it until the child reaches the age of majority. You may also be able to put it into a 529 account, which would help pay for college and has certain tax advantages.
If the amount is no more than $5,000, it may be possible to request that a parent or other guardian take possession of the inheritance and manage it on behalf of the child. Larger amounts may require a conservatorship supervised by the court. The most obvious choice of conservator would be a parent, unless both are deceased, but the court may choose someone else.
How do you choose the right option?
Without guidance from a will, making a decision regarding what to do with a minor child’s inheritance could cause some issue. Numerous factors could influence your decision. For instance, if you know that the minor child intends to go to college, a 529 account may be the best option. If the child has special needs, creating a special needs trust might work best.
In other cases, you may want to leave the choice open so that the child can make the choice upon reaching adulthood. Without any instructions or pre-planning on the part of the parents, you can only do what you, and perhaps the court, believe would serve the child’s best interests. If you do come up with a reasonable plan, the court may approve it without the need for further hearings or documentation.