Planning Your Child’s Inheritance? What to Know

If you have money, land, or other assets, you may be thinking about leaving them to your child as part of an inheritance. In the state of North Carolina, minors cannot technically lay claim to whatever inheritance you leave them until they turn 18 years old. So, how do you go about setting up an inheritance for your child then? Well, there are several ways. One of the most basic ways to pass along your assets to your loved ones after you pass away is via a will. However. some of the best ways to pass on an inheritance is to set up a trust, guardianship, or an arrangement under the North Carolina Uniform Transfer of Minors Act.

When is the last time you set up a trust? Have you ever heard of the North Carolina Uniform Transfer of Minors Act? Chances are you have not, and that is okay. The team at Arnold & Smith, PLLC is standing by to help you through the process and answer any questions you may have.

All About Trusts

Trusts are secure and safe ways to pass on your property, money, and any other assets you might have. Additionally, unlike other methods of passing on an inheritance, trusts can bypass the costly and often time-consuming probate process. They are also easy to manage because well-drafted trusts come with a set of detailed instructions. When hashing out the details of a trust, parents can leave detailed instructions about when and how the trust funds should be distributed. For example, some parents may set aside a certain amount for college and another chunk for their child’s first home. Other trusts, such as spendthrift trusts, can be used by parents to ensure that their children do not squander the inheritance left to them.

It is important to note, however, that trusts are managed by an appointed trustee. A trustee is a person chosen to help manage and distribute the trust funds in accordance with the instructions included in the trust. Thus, it is vital to draft clear instructions that achieve your trust goals.

The North Carolina Uniform Transfer to Minors Act (NCUTMA)

Minor children can receive an inheritance from anyone, including parents, grandparents, aunts and uncles, and family friends under the North Carolina Uniform Transfer to Minors Act (NCUTMA). If you are unfamiliar with the NCUTMA, it is a law that grants anyone the power to place an inheritance into a custodial account. Typically, money is placed in a custodial account. That account is managed by an account custodian, who is chosen by the individual passing down the inheritance. The account custodian is responsible for ensuring that the money is safe and sound, typically at a bank, until the beneficiary comes of age.

Until the child’s eighteenth birthday, the account custodian can spend money in the account on the child’s basic necessities, such as food and clothing. Whatever is still in the account when the child matures then goes to the child.


Guardianships are set up when there is not a trust in place or an arrangement set up under the North Carolina Uniform Transfer to Minors Act. Guardianships must be supervised by the court, and anyone who wishes to become a guardian must first apply through the court. When a guardianship is approved, that person will assume responsibility for the child’s inheritance. This means the guardian must look after any property, money, and other assets including in the inheritance until the child comes of age.

Until the child turns eighteen, the guardian is required to submit detailed accounting reports to the court to make sure the inheritance is being properly managed. It is important to note, however, that guardians can spend some of the inheritance funds on the child as long as they obtain court approval.

If you are thinking about leaving an inheritance to your child, consider setting up a trust or arrangement under the North Carolina Uniform Transfer to Minors Act. Not only do these options help keep the inheritance safe until your child grows up, but they also help ensure the inheritance will still be there when your child comes of age. Without a plan in place, there is no guarantee the inheritance will still be there when your child turns eighteen.

If you do not have a trust or plan in place to pass an inheritance on to your child, contact Arnold & Smith, PLLC. Our team would enjoy working with you to set something up. Give our offices in Charlotte, Mooresville, or Monroe, North Carolina a call to set up an initial consultation.