If you have a fairly modest estate, you may not think that it makes sense to set up a trust to take care of your minor children after you pass away. However, you may still have some property that you want to be passed to them after your death.
One of the ways that you can do this is by putting those funds in an account that goes through your will. This is called a custodian account, and you set it up for your kids under the Uniform Gift to Minors Act. This Act allows you to create a custodian account for minor children. These are not the same thing as regular banking accounts that you would set up for a child. Instead, this allows you to deposit money into the account while you’re still alive and set up a successor to take over the account in the event that you die while your child is under 18 years old.
The basic premise is that you are the custodian of the money unless and until you pass away while your child is still under age. However, custodian accounts do not make sense in all situations. In order to find out if this is the best method for you to use in your estate planning process, you need to consult with an estate planning attorney who can look at all of your assets as a whole.
There are many different ways to handle giving assets to your children after your death, so check with your attorney before setting up a custodian account as it may not be the best situation for you. There is no one-size-fits-all approach to estate planning.