How Do I Deed Property to a Minor Child?
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A person under the age of 18 cannot legally take title to real estate. A guardianship is needed in order for a transfer of a property deed to a minor child to occur. It is possible that the property could be transferred to a trust, or the mother could leave shares of the property in her will. There are many manners of estate planning, such as a parent reserving a life estate in a deed, so that the property transfers to a child upon death, or joint tenancy with right of surivorship, which vests immediate right of possession, transferring the joint owner's share to the survivor owners at death. I suggest you contact a local attorney who can review all the facts, documents, and tax implications involved.
The living trust is created with the execution of Declaration of Trust by the Grantor(s). The declaration will detail the terms and conditions of the living trust, including who will serve as the Trustee. Once the trust is created, assets are transferred to it. This is called "funding the trust." If real estate is to become part of the trust, a deed must be executed properly, naming the Trust as the Grantee. The deed then must be property recorded. A warranty deed or quit claim deed is commonly used to transfer real property to the trust.
A trust can also be created by a will and formed after death. Once assets are put into the trust they belong to the trust itself, not the trustee, and remain subject to the rules and instructions of the trust document. Most basically, a trust is a right in property, which is held in a fiduciary relationship by one party for the benefit of another. The trustee is the one who holds title to the trust property, and the beneficiary is the person who receives the benefits of the trust. While there are a number of different types of trusts, the basic types are revocable and irrevocable.
A revocable living trust may be amended or revoked at any time by the person or persons who created it as long as he, she, or they are still competent. A living trust agreement gives the trustee the legal right to manage and control the assets held in the trust. It also instructs the trustee to manage the trust's assets for your benefit during your lifetime and names the beneficiaries (persons or charitable organizations) who are to receive your trust's assets when you die.
The trust document gives guidance and certain powers and authority to the trustee to manage and distribute your trust's assets. The trustee is a fiduciary, which means he or she holds a position of trust and confidence and is subject to strict responsibilities and very high standards. For example, the trustee cannot use your trust's assets for his or her own personal use or benefit without your explicit permission. Instead, the trustee must hold and use trust assets solely for the benefit of the trust's beneficiaries
Irrevocable trusts are trusts that cannot be amended or revoked once they have been created. These are generally tax-sensitive documents. Some examples include irrevocable life insurance trusts, irrevocable trusts for children, and charitable trusts. With an irrevocable trust, all of the property in the trust, plus all future appreciation on the property, is out of your taxable estate. They may also be used to plan for Medicare eligibility if a parent enters a nursing hiome.
A trust created in an individual's will is called a testamentary trust. Because a will can become effective only upon death, a testamentary trust is generally created at or following the date of the settlor's death. They do not address the management of your assets during your lifetime. They can, however, provide for young children and others who would need someone to manage their assets after your death.
A Last Will and Testament Form with All Property to Trust (Pour Over Will) assumes that a living trust has already been established. This will is one made in conjunction with a trust in which all property is designated to be distributed or managed upon the death of the person whose possessions are in trust, leaving all property to the trust. A pour over will is a safety measure designed to protect any assets which somehow were not included in the trust and make them assets of the trust upon the party's death. A pour over will often provides that if the trust is invalid in whole or in part, the distribution under the will must be made under the same terms as stated in the invalid trust.
