When the children become orphaned, the parents will usually want to make certain that all or most of their probate and non-probate property can be transferred to their children. Parents name guardians in the wills, and in this way they also usually make provisions for adequate financial care for the minor children.
 Common sources of non-probate property may include life insurance proceeds, joint tenancy survivorship arrangements, and trust property.
A fiduciary, which is legally responsible for their financial care, usually need to be turned over with large amounts of property. Moreover, the parent can choose among a financial guardianship, a trust, or a custodianship under the Uniform Acts.
The financial guardian is usually designated by the court. He must file a formal accounting with the court every one or two years, and obtain written permission to perform unusual transactions, such as selling real property. The top criteria for this role are expertise in financial management for selecting a financial guardian.
Parents may also choose a trustee, instead of a financial guardian, to manage the parent’s property for the minor child. While the parent’s are living, they can create the trust or make it through their will.
Including the fact that it is not subject to court supervision, trusts have many advantages and it can be flexible. You can include provisions concerning whether to distribute property outright when the children reach the age of majority, or whether to retain it and distribute only the income.
While a separate financial guardianship must be set up for each minor, trusts can have multiple beneficiaries. They can also include specific provisions relating to income distributions to different beneficiaries at different times, while financial guardianships do not have this feature.
For benefiting the minor child the parent may wish to leave property to a custodian. In general, this is accomplished through either the Uniform Gifts to Minors Act, (UGMA), or Uniform Transfer to Minors Act (UTMA).
As these custodianships are not subject to court supervision, they offer more privacy than financial guardianships. The obstacles to these arrangements include the fact that in most states, property held in either a UGMA or UTMA account must be turned over to the minor child once they reach age 21. But there are limitations on the types of property that can be transferred to or placed into these accounts.
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