Proposed Bill Would Lower Age of Minor for Gift Transfers
It’s important for us, as probate and trust lawyers, to keep up to date on laws, court cases, and bills relating to our cases. Recently, the Arizona House of Representatives read a proposed bill that, if passed, would impact the giving of gifts to minors. The bill, sponsored by representatives Sherwood, Alston, Mendez, and Quezada, was introduced in late January.
The bill concerns Section 14-7651 of the Arizona Revised Statutes, relating to the Arizona Uniform Transfers to Minors Act. Currently, the law defines an adult as someone “who is at least twenty-one years of age” or, conversely, a minor as someone who is under twenty-one years of age. The bill would change the age of an adult to eighteen. A minor would be someone under the age of eighteen.
The Uniform Transfers to Minors Act is important because it outlines when it is required to transfer property to a custodian for a minor person receiving a gift or other property.
If a person transfers certain property under certain circumstances to a minor, the property will be held in the custodian’s name for the benefit of the minor. The person giving the property is not required to set up a special trust. Once the minor reaches the age of adulthood, the assets become the minor’s property, who can use them however he or she chooses. Depending upon the type of property or transfer, the minor may become eligible to receive the property when he/she reaches the age of eighteen or twenty-one.
Should this bill become law, the age at which a person would be able to receive certain property without the oversight of a custodian would be lowered. But, if the transfer is first made to the person before he reaches age eighteen, certain types of transfers would still not be released to the minor until he/she reaches twenty-one years of age. For example, a transfer to a custodian for someone under eighteen pursuant to a will or trust would still not be released to the person until he/she reaches twenty-one years of age.
This could prove problematic if the 18 year old is not financially responsible and, for example, the gift was intended to help pay for college and was spent otherwise. Of course, there are other ways to safeguard payments for college, such as 529 Plans or the direct payment of college expenses. Also, if you are old enough to vote, enlist in the military, and live on your own, why should you not be able to legally receive and own a monetary gift? Contact the Berk Law Group with these and any related questions.