Minors in California (people under the age of 18) cannot own assets directly. Minors must own assets through a guardian. However, minors can be Trust beneficiaries. Typically, when a Trust is established with minor beneficiaries, the Trust terms require the minors’ shares to be held in Trust rather than distributed outright.

Trust shares for minor beneficiaries are typically held in the Trust until the beneficiary reaches a certain age. Often, the young beneficiary’s Trust share is distributed in increments rather than an outright distribution. The Settlors who created the Trust have discretion on the specific terms of distribution for minor beneficiaries.

The bottom line: minors can be Trust beneficiaries, but it may not be wise to distribute a large sum of money to an 18-year-old. Trusts can be set up so the Trustee will hold onto and invest the assets until the beneficiary reaches a more responsible age.