By Ryan Conklin, Wright & Moore Law Co., LPA
At the ripe old age of 33, I am surrounded by children. Many of my friends have youngins’ or are expecting, my wife’s family has three boys, and plenty of our clients have kids. Although they are the smallest family members, minors play big parts in succession planning. Here are some pointers to help with planning for minors:
What is the age of majority in Ohio?
First things first, what constitutes a minor child? Ohio law adopted 18 as the age of majority. So a minor child is one that has not yet turned 18.
Can minor children own titled assets?
Minor children are not recognized as being able to own titled assets such as land, cars and bank accounts. For example, pretend a grandparent conveys a 100-acre farm to your 10-year-old daughter. Since your daughter is not 18 and cannot take title, Ohio’s Transfers to Minors Act will require that the farm be held by a “custodian.” The custodian (likely a parent) acts as a fiduciary for your daughter, maintaining the farm until she turns 18. Around your daughter’s 18th birthday, the law requires that the custodian deed over the gifted farm.
Who takes care of the kids if both parents pass away?
To address this issue, both parents need to execute wills that nominate guardians for the children. Make sure that the nominated guardians are the same in both wills. You cannot nominate guardians through a trust, it must be in a will. If you don’t have a will, a judge will decide who takes care of your kids.
Is a will or trust the best way to transfer assets to minors?
The answer is both! A will can create a court-administered trust that is managed by a trustee and overseen by a judge until the children turn 18. Here, all of your assets are public record, along with any income or expenses that are part of the trust. In general, when each child turns 18, they receive their share of the pot with no restrictions.
If the parents create a trust now, it avoids the courts altogether and it offers more flexibility with staggered or delayed distributions. If you want more direction regarding farming asset distribution, protection until children reach an older age, or want to keep your affairs private, creating a trust now is the way to go.
What if I have primary custody of a child and my new spouse is not a biological parent?
In this instance, most likely the child’s other biological parent will become the primary guardian, even if your new spouse is raising the child. Here, completing the adoption process is crucial for inheritance and guardianship purposes. If a child, or even an adult, has not been formally adopted through court proceedings, that person may not be treated as one of your heirs.
An estate administration with no plan can be messy if minor children are involved. It is likely that additional hearings, court costs, and attorneys’ fees would be required to complete the administration. This only takes away from the assets you left for your children. If you have minor children and have not put together a plan to pass your assets to them, or if you need assistance with child or adult adoption, contact a probate attorney to start the process.
Wright & Moore Law Co., LPA is a proud partner with Ohio Farm Bureau. Since 1988, our firm has assisted farmers, rural residents, and landowners from all over the state with their farm succession planning and agricultural legal needs. To learn more about Wright & Moore, visit OhioFarmLaw.com.