Effective April 6, 2017, parents and grandparents and other individuals seeking to leave property to minor children can now delay delivery of property to minors until the age of 25 pursuant to the Ohio Transfers to Minors Act (OTMA).
So why does that matter?
The Ohio Transfers to Minors Act allows people to leave property to a custodian to manage and distribute property for a minor child’s benefit. Prior to the law, if you wanted to leave property to a minor, it would require either a guardian to be appointed by probate court to manage the funds, and the costs and filing requirements of that arrangement, or it would require the creation of a trust, and the fees associated with that arrangement.
Hence, the Ohio Transfers to Minors Act gave the option of a custodial arrangement that decreased the cost and administrative headaches of leaving funds to minors, as under the custodial arrangement there was not need to establish a trust or have court oversight. However, the law had an age limit. All the funds had to be delivered to the minor by no later than age 21. That means if an individual wanted to delay delivery past the age of 21, the only option was a trust.
With the change on April 6, 2017, the delivery of property from the custodian to the minor can now be delayed until the age of 25, as long as the age is specified in the instrument.
For more information on estate planning, please contact a Cleveland estate planning lawyer.