A statement regarding custodianships is the location in your simple will where you will briefly describe how you would like any property held in a custodianship to be used for the young beneficiary for whom the property is held. This statement is also where you will indicate whether you want to delay a beneficiary’s receipt of custodial property beyond when the beneficiary reaches age 21.
Required Reading
Custodianships and Your Intent
It is very common for a testator to want to control how property held in a custodianship will (or will not) be used for the benefit of the beneficiary of the custodianship. However, a custodianship is not a trust, and the testator who makes a custodianship under his will has very little power to decide how the custodial property will be used after the custodianship is created. The Uniform Transfers to Minors Act controls how the property can be used, and it gives fairly broad decision-making power to the custodian, allowing the custodian to pay expenses for the beneficiary as the custodian “considers advisable.”
While you cannot control whether a custodian will consider using custodial property advisable, you are free to tell the custodian your opinion. Our simple will template contains model language indicating that custodians should at least use custodial property to maintain the beneficiary’s standards of living and promote the beneficiary’s personal growth. You may modify this language to encourage the custodian to be more or less generous with the custodial property, but keep in mind that the custodian does not have to follow your recommendations.
Age of Beneficiary at Time of Distribution
Unless you specify otherwise, custodial property is held in a custodianship until the earlier of the beneficiary’s death or the beneficiary reaching 21 years of age. The Uniform Transfers to Minors Act allows you to delay the distribution of the custodial property until the earlier of the beneficiary’s death or the beneficiary reaching 25 years of age. To extend the age of distribution, you must write the extension into your will. Our instructions, below, will help you write this extension into your will if you want to include it.
Write Your Statement Regarding Custodianships
Open your copy of the simple will and locate the heading entitled STATEMENT REGARDING CUSTODIANSHIPS. If you are happy with it, you can leave the existing statement in place.
Statement Regarding Custodianships: Encouraging Use of Custodial Property
5. STATEMENT REGARDING CUSTODIANSHIPS
I desire that at any given point in time the then current beneficiary of any custodianship referred to herein truly enjoys the financial resources thereof. At the very least, I want such beneficiary’s respective standards of living to be maintained. To this end, I encourage the custodian of any such custodianship to be flexible and generous in assessing the situation of the beneficiary thereof and to use the custodianship assets to the extent permissible by law to promote the beneficiary’s personal growth.
If, on the other hand, you prefer to encourage the custodian not to use any of the custodial property, you should replace that statement with this one:
Statement Regarding Custodianships: Discouraging Use of Custodial Property
5. STATEMENT REGARDING CUSTODIANSHIPS
I desire that the custodian of any custodianship referred to herein preserve the financial resources thereof to the greatest extent possible so as to maximize the value of the custodial property at the time it is ultimately distributed to the beneficiary thereof. To this end, I encourage the custodian not to expend the financial resources of any such custodianship except to the extent doing so is necessary to protect the health or safety of the beneficiary thereof.
If you decide you want to extend the age at which custodial property will be distributed to young beneficiaries from age 21 to age 25, you will need to add another paragraph to this section of your simple will. Likewise, if in the “Gifts” section of your simple will you decided to include language requiring custodianships for gifts to beneficiaries older than age 21, you will need to add this additional paragraph. If you decided not to extend the age of distribution from 21 to 25 and did not include language requiring custodianships for gifts to beneficiaries older than age 21, then you should not add this additional paragraph; you are done writing your statement regarding custodianships.
If you are adding this additional paragraph, add the number 5.1 to your above statement about your desires of how the custodian should use the custodial property. Under that statement, make a new paragraph numbered 5.2, with the following text:
Statement Regarding Custodianships: Extending Age at Distribution
5. STATEMENT REGARDING CUSTODIANSHIPS
5.1 I desire that […]
5.2 I desire to extend every custodianship required to be created by this Will to the earlier of the beneficiary thereof attaining twenty-five years of age or such beneficiary’s death. My Personal Representative shall so extend every custodianship required to be created by this Will.
Example Statement Regarding Custodianships
Below is an example of how a fully-drafted statement regarding custodianships might look.
5. STATEMENT REGARDING CUSTODIANSHIPS
5.1 I desire that at any given point in time the then current beneficiary of any custodianship referred to herein truly enjoys the financial resources thereof. At the very least, I want such beneficiary’s respective standards of living to be maintained. To this end, I encourage the custodian of any such custodianship to be flexible and generous in assessing the situation of the beneficiary thereof and to use the custodianship assets to the extent permissible by law to promote the beneficiary’s personal growth.
5.2 I desire to extend every custodianship required to be created by this Will to the earlier of the beneficiary thereof attaining twenty-five years of age or such beneficiary’s death. My Personal Representative shall so extend every custodianship required to be created by this Will.
Once you have finished editing your statement regarding custodianships, go back to the list of instructions.
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