How Does One Distribute Gifts From an Estate To Minors?
If the decedent’s Will contains a testamentary trust benefitting the decedent’s children, the gifts to minors are transferred to the trustee to be administered in accord with the terms of the trust instrument. The minors do not come into personal possession of the gifts until such time as the trust language specifies, which is some point in their adulthood.
Where no trust intervenes, the statute specifies three alternative approaches:
1. If the gifts from an estate are made directly to persons who are minors, the personal representative must deposit the minor’s funds in an insured bank account at interest. The minor will be allowed to withdraw from these funds while still a minor by order of the court, or, without court order, when the minor reaches eighteen years of age and proves her age to the bank in which the funds are deposited. RCW 11.76.095(1).
2. The court may appoint a guardian for the minor and the personal representative may deliver the minor’s funds to that guardian. RCW 11.76.095(2).
3. A custodian of the funds may be selected, and the personal representative may deliver the funds to that person subject to the Uniform Transfers to Minor’s Act (UTMA). RCW 11.76.095(3). The UMTA defines a minor as a person less than twenty-five years of age, and an adult as a person twenty-one or more years of age. RCW 11.114.010. A UTMA custodian of funds may be nominated by Will or trust, or, if those persons are unable to serve, by the decedent’s personal representative or trustee or a member of the minor’s family. RCW 11.114.050, 11.114.060. Custodial funds or other assets are transferred by attaching the words “… as custodian for …. (name of minor) under the Washington uniform transfers to minors act.” RCW 11.114.090. Custodianship of custodial funds may be extended to the minor’s twenty-fifth birthday by the election of the person transferring the funds to the custodian under certain conditions. RCW 11.114.090(2), 11.114.200(2-4). A custodian of UTMA funds is a fiduciary with respect to the minor’s interest in the assets, and is required to observe the rules and practices that govern trustees. RCW 11.114.120, 11.114.130. Custodians may, without court order, pay custodial funds to the minor or expend them for the minor’s benefit. RCW 11.114.140. A custodian’s expenses shall be paid from custodial funds, and once yearly the custodian may seek court approval of compensation for the custodian’s services. RCW 11.114.160. Liability to third persons is somewhat limited concerning custodial assets. RCW 11.114.170. A custodian may decline to serve or resign. Custodial property must promptly be put in the control of a successor custodian. A custodian may be removed for cause (RCW 11.114.180) in which case the removed custodian shall account for the custodial property to the court and successor custodian. RCW 11.114.190. A custodian must transfer the custodial property to the minor when the minor reaches twenty-one years of age, or eighteen years of age for trust transfers or family debts owed the minor, or when the minor dies. RCW 11.114.200.