Question:

I gave my 16-year-old grandson a third interest in a small business, providing that his mother will exercise voting rights until he is of legal age. He now has better judgment than most adults I know. Is there good reason to change the status?
-Name Withheld

Answer:

Transferring voting rights to your grandson might have gift tax implications, says Charles A. Wry, Jr., a business attorney in Waltham, Mass.  In addition, your grandson's ability to exercise voting rights may be limited under the applicable state law or under the business's governing documents, he says.

However, changing your grandson's ownership status at this point may be moot anyway. Depending on the structure of the original transfer, you may not have the ability to change your grandson's status, Wry says. To find out if such a change is even possible, speak with a business attorney in your area, he says.