Giving Away Non-Cash Property

Not only gifts of cash can be spread over several years. You can give away some stocks now, some next year. You can even give real estate in pieces -- physical pieces, if that's possible, or pieces (percentages) of ownership.

Gifts to Children

Giving children valuable property before they are adults raises the important question of who will manage the property for the child. If you give a large gift to a child under 18, an adult must be responsible for the money.

Fortunately, it's easy to arrange for an adult to manage the property, by setting up either:

• an irrevocable child's trust, or
• a custodianship authorized by state law.

The second way, a custodianship, is easier: You simply name an adult to serve as "custodian" of the money.

Custodianships

Custodianships are authorized under a law called the Uniform Transfers to Minors Act (UTMA), or the Uniform Gifts to Minors Act, one of which has been adopted by every state. All you need to do is appoint a custodian, in writing, and give the property to that person, instead of to the child directly.

The custodian must manage and use the money for the benefit of the child. When the child reaches adulthood (defined as age 21 in most states), he or she gets whatever's left.