Most gifts to minors arise from a parent or grandparent’s desire to fund a child’s education or other special purpose. These gifts are usually designed to protect against unwise spending on the part of the minor, or to protect the assets from creditors. Minimizing estate taxes and shifting wealth to future generations can also be a benefit.  However, under the Uniform Gift to Minors Act or the Uniform Transfer to Minors Act the age of majority depends on state law, which in New York State is 18 unless at the time the gift is made the age of 21 is specified.

Many parents and grandparents consider even age 21 far too young to receive substantial wealth.  To maintain assets for the benefit of a child significantly past age 21 a trust can be created for the benefit of the minor with terms for distribution of income and principal in conjunction with the exact wishes of the grantor.  For example, a trust for the benefit of a minor may provide that income can be distributed beginning at age 21 but principal distributions occur staggered at the more mature ages of 25, 30 and 35.  Of course, the trust can also provide that the Trustee have discretion to distribute principal for health, education, welfare or maintenance at anytime so the grantor is assured that principal distributions will not occur too early but also that the Trustee can use discretion to distribute anytime to address legitimate needs of the beneficiary.