Property Management and Estate Planning for Nebraska Minors

Present tax laws provide an added stimulus for the traditional benevolence which has brought minors into an economic ownership of wealth. It has become increasingly important for estate planners to consider all family members, adults and minors, present and future, and their estates, to achieve a maximum enjoyment of property for the entire family. The purpose of this article is to evaluate the available planning methods under Nebraska law for dealing with the vexatious problems which arise from ownership of wealth by minors. This includes a consideration of the nature and extent of a minor's disability to deal with his own property; a comparison under Nebraska law of guardianships, trusts, and custodianships; and some fairly clear recommendations which can be made to define the relative estate planning roles of outright gifts, with or without guardianships, trusts and custodianships. I. The Nature and Extent of a Minor’s Disability to Deal with Property … A. Minority Defined … B. Contracts … (1) The General Rules of Voidability … (2) Exceptions to the General Rules … (a) Necessaries … (b) Misrepresentation of Age … (c) Statutes … C. Gifts … D. Wills … E. Trusts … F. Powers of Appointment … G. Partnerships … H. Joint Ownership II. A Comparison of Legal Implications of Guardianships, Custodianships, and Trusts … A. Subject Matter … B. The Fiduciary … (1) Guardian … (2) Trustee … (3) Custodian … C. Bond … D. Judicial Supervision of Administration … (1) Jurisdiction … (2) General Procedure for Judicial Supervision … (3) Requirement of Prior Judicial Approval … (4) Nonjudicial Settlement of Accounts … E. Application of Income and Principal … (1) Trusts … (2) Custodianships … (3) Guardianships … (a) Section 38-503 … (b) Section 38-501 … (c) Section 38-601 … (d) Section 38-111 … (e) Sections 38-126 and 38-127 … (f) Summary … F. Tax Consequences … (1) Guardianships … (2) Custodianships … (3) Trusts … G. Special Problems in Defining “Support” … (1) Existence of the Obligation … (2) Extent of the Obligation … H. Liability for General Debts of Minor … I. Investment Standards … J. Leases … K. Termination and Succession to Property … (1) Upon Attained Age … (2) By Death of the Minor … L. Other III. Conclusion