How Oklahoma Parents Can Protect Inheritance for Minor Children

When you’re a parent, planning for the future doesn’t just mean saving money. It means making sure that your children are financially secure if something were to happen to you. But in Oklahoma, minors cannot legally inherit assets or own property. The court can name someone as property guardian, but this takes time and money. It’s generally better for parents to be proactive and plan for every possible outcome with the help of an estate planning attorney.

At Entz Burton & Associates, we help our clients prepare for all sorts of potential scenarios. While no one wants to pass away and leave their minor children behind, these things do happen—and being prepared can give you peace of mind. Attorney Jeffrey Burton works with clients to help them create estate plans that address their unique needs. Call our established estate planning law firm at 405-773-9800 to set up a consultation now.

Why Standard Inheritance Doesn’t Work for Minors

When parents leave assets directly to a minor child via their will or life insurance policy, the child cannot take ownership of them. Under Oklahoma law, minors cannot legally manage or control property. The court, then, won’t release assets to a child. They require that an adult manage the allotted funds until the child is no longer a minor.

If you do not set this up ahead of time with an estate planning lawyer in Oklahoma, it can be costly, time-consuming, and stressful. In the best-case scenario, there’s one obvious choice to serve as guardian of the child’s money, and they step in to do so. In a more realistic scenario, there are multiple adults who think they’re the best choice, which leads to in-fighting and delays in access to the funds in question.

The good news is that there are other ways to handle this situation. An estate planning attorney can help you protect your child’s best interest and your money.

Guardianship of the Estate for Minors

One way you may protect your child’s inheritance is with a guardianship of the estate. This arrangement requires a judge to appoint an adult to manage the child’s money. The main advantage of this option is that there is court oversight involved, so there’s little concern about the adult misusing the funds. However, the court requires approval for certain financial decisions, so the process can be cumbersome for the guardian and result in unnecessary delays. As a result, many parents look into other options to manage their child’s inheritance.

Testamentary Trusts

If parents want more say in how their child’s inheritance is used, they often opt for a testamentary trust. This trust is written into your will and goes into effect after your death. You get to name a trustee to manage the assets on behalf of your child. This option gives parents a lot of flexibility—you may earmark money for education, major milestones, or medical expenses.

Additionally, you get to decide when your child receives full control of the funds. If you worry about them spending it all at once—a very real possibility for an 18-year-old—you can choose partial distributions as they age.

Oklahoma UTMA Accounts

The state of Oklahoma has created its own option for transferring assets to children. The Oklahoma Uniform Transfers to Minors Act allows parents to create a UTMA account. An adult custodian manages the money until the child reaches the age of majority. This is a quick and inexpensive option, making it a convenient solution for smaller sums of money. However, unlike testamentary trusts, a UTMA account gives a child full access to funds when they reach the age of majority. That’s why people tend to go this route only for smaller sums; giving an 18-year-old unfettered access to $10,000 is an entirely different beast than giving them unrestricted access to $100,000.

Choosing Your Path Forward

With all these options in mind, it’s important to note that there is no one right answer. It all depends on your goals, how much you are passing down to your children, and how much control you want over your assets. Talking to an estate planning lawyer about your priorities and goals can help you make the best choice for your family.

Find Out How Entz Burton & Associates Can Help You

Whether you’re interested in starting your estate plan or modifying your plan to include minor children, our estate planning law firm is here for you. Schedule a consultation now by calling us at 405-773-9800 or sending us a message online.