In the “Houston, We Have a Minor Problem” episode of Law and Financial Order, financial advisor Robyn Wolcott and attorney Erin Duques share practical guidance on planning for your children’s future. Erin explains that a minor is anyone under the age of 18 and emphasizes the importance of having a thoughtful plan in place to protect them.
They discuss why it’s important not only to decide who would care for your children if something happened to you or your spouse, but also who would manage their finances. Establishing a trust can help ensure your children are financially supported, and appointing a trustee to oversee those assets until a child reaches a designated age can be a wise strategy.
They also highlight the value of planning ahead for future financial needs, including options such as a Roth IRA and a 529 education savings plan.
Robyn also explains UTMA (Uniform Transfers to Minors Act) accounts, which are custodial investment accounts created for a child and managed by an adult custodian. The assets in a UTMA legally belong to the child, not the parent, and the custodian manages the account until the child reaches the age of majority, typically between 18 and 21 depending on the state.
UTMA accounts can hold a wide range of assets, including stocks, ETFs, mutual funds, bonds, cash, real estate, and other property. Contributions to a UTMA are irrevocable, meaning the money cannot be taken back and must always be used for the benefit of the child.
As always, every family’s situation is unique, and planning for your children’s future involves important legal and financial decisions. Be sure to consult with your financial and legal professionals to determine the strategies and accounts that best fit your family’s needs and long-term goals.
If you're curious to hear more, you can listen here. Law and Financial Order - Podcast - Apple Podcasts
*Erin Duques is not affiliated with or endorsed by LPL Financial and Warner Wealth.
**Robyn Wolcott, James Warner, Warner Wealth and LPL Financial do not provide legal advice or services. This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation
***This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.