Does a Lawyer Have to Set Up a Trust Account for a Minor Beneficiary?

A lawyer can explain how to use a trust for your personal circumstances.
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Because a minor cannot legally control his property, including his own money, parents or relatives can establish a trust account that holds funds for the minor's benefit. While making a trust is a legal transaction, it does not usually require hiring a lawyer. A private citizen can create the trust herself or with the help of a financial institution.

Trust Basics

Trusts are not only for the very wealthy; they are financial tools that help any person transfer assets out of her name and put legal ownership into another entity. They also let your inner control freak unleash its need to micromanage because you set the terms about which assets become part of the trust, who the beneficiary is and who the trustee is. All of these terms must be included in a signed document to form the trust, which does not specifically require a lawyer's input. As the grantor -- the person forming the trust -- you can make yourself or someone else the trustee who manages the trust. You then puts assets into the trust, including cash, property deeds and life insurance policies.


A trust helps prevent a child from getting the money directly before he's an adult and mismanaging it. As the grantor, you designate the terms of how and when the child receives funds from the trust. For example, you might designate that the funds be used for his private school or college tuition. Another option is to provide a generous allowance to a child's guardian to reimburse her for expenses that she covered for the child, such as child care, groceries and medical expenses.


The Uniform Transfers to Minors Act, or UTMA, and the Uniform Gifts to Minors Act, or UGMA, have been adopted by every state and provide a more streamlined approach to creating a simple trust for minors. UGMA concerns cash and securities, while UTMA deals with all kinds of property that are transferred to another person to handle for the minor's benefit. Under these laws, you can transfer assets that you may or may not be able to revoke, and the custodian has the legal duty to control it until the minor reaches the age of majority that is established by the law of his state. This type of transaction doesn't require a trust document, and it was established to eliminate the need for an attorney.


If for some reason, the minor gets his hands on a large asset, most states require that a guardian be appointed to administer the proceeds that are paid to the minor child. While a lawyer may not be necessary to appoint a guardian, you don't want the minor child to wind up with someone who steals from him or mismanages the funds. In this type of situation, you might decide to hire an attorney to protect the minor's legal interests.

Totten Trusts

The Totten trust is also known as a "poor man's will" because it permits a not-so-wealthy person to make a trust arrangement without all of the expensive legal implications. You can set up this kind of account at a bank, credit union or brokerage firm by titling the account as "John Doe in trust for Junior Doe." This gives John Doe control of the account while he is alive, and the funds automatically pass to Junior when John dies.


Preparing a trust can save you big bucks if you avoid hiring an attorney to do the job and opt for a book, software or online service. Even if you aren't required to get a lawyer, you might want to hire one anyway, just to be safe. Otherwise, you could wind up messing up a deed, leaving off a successor trustee or failing to account for circumstances that a seasoned estate planning attorney could warn you about.

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