Guardianship of Minor Property

David: [00:00:00] Hello, everyone. This is David Shulman. I’m here with my partner, Jill Ginsberg. We’re Ginsberg Shulman, where we specialize in estate planning, probate, trust administration, elder law, and guardianship. And this week, we’re going to talk about the guardianship of a minor’s property. In our last video, we spoke about the guardianship of incapacitated persons.

But if you’re a minor, and if a minor is a person who’s under 18 and either inherits, or receives in a lawsuit a certain amount of money, then a guardianship of their property is required. Jill, why don’t you talk a little bit about that?

Jill: Well, with the guardianship of the property for a minor, obviously, you know, a lot of parents say to me, but you know, I’m the guardian.

Yes, for the guardian of the person, there will not be a guardianship. You obviously are able to make decisions for your children when they are under 18 years old, come back and talk to us when they’re over 18. But when they’re under 18. For property, if they inherit property [00:01:00] or if there is a settlement or some type of lawsuit, then if there is a settlement or property or inheritance greater than 15, 000, you will need a guardianship.

David: And what does that entail? What does that entail? What’s the process? How does that work?

Jill: Okay, so the way that a guardianship works for a minor is the parent or whoever the guardian, the person responsible for that child, petitions for guardianship of the child. It is a petition for guardianship. There’s also an application, a credit check, and one very important thing, you cannot be convicted of a felony.

If you are convicted as a felony, you cannot serve as a guardian and somebody else will have to serve. You also need to have a good credit score because obviously if you don’t have a good credit score, you can’t handle the money for a guardian.

David: So let’s say my distant uncle, [00:02:00] Ralph, passes away and leaves everything to my 10 year old child and leaves them 60, 000.

And now my 6 year old child or 10 year old child is about to inherit 60, 000. What do I have to do?

Jill: You will have to petition for guardianship of your child, of the property, and you will petition to put that 60, 000 under guardianship. Once it’s under guardianship, depending on the county that it’s in, you will either need what’s called a restricted account, or you will need a bond, and for the life of your child until they were 18 years old, you will explain to the court how much money you spend, you will file an accounting every year.

And, when they’re 18, you will file a discharge.

David: So even though there’s this money, there’s this $60,000 in this account, which is my for my kid. Let’s say I wanna pay for summer school or summer camp, or go on vacation. Every single time I wanna do something for that. And I have to go to the lawyer and the lawyer to go to the [00:03:00] court and petition the court for permission to spend the money.

Jill: Absolutely. You’re absolutely correct.

David: So it seems, and it’s only, it’s been 15, 000. It seems for decades. It hasn’t changed with inflation.

Jill: Nope, it’s been 15, 000 for quite a while. There are ways to work. I wouldn’t say work around that, but there are ways to work within the system. But yeah, for the most part, you’re going to need a guardianship and you’re going to need a lawyer and it’s going to go through court and you’re going to have to petition the court for all of your expenses.

David: And you’ve got to pay your lawyer too. And do these annual filings and to do the petitions to pay whatever the bills are. And sometimes when there’s lawsuit settlements that can’t be helped. But I think with regards to inheritance, with the proper planning, these types of guardianships can be avoided. And that’s one of the things that we do is we talk to our clients who may have minor children or minor [00:04:00] beneficiaries about how to avoid a guardianship of a minor.

It’s property and the best way to do this is to leave property through trust. Then if someone comes and they do a trust to leave the property to their minor, or the cash to their minor children or other minor beneficiaries, then they don’t necessarily have to go through the process of doing the annual guardianship.

Jill: No, no one wants to actually go through a guardianship. So if you can actually plan for it, and obviously the best way to do it, one of the best ways is a trust for a minor, then you’re better off by, you know, I would much rather have my estate planning done with trust for children that have to go through a guardianship and have some judge made, no offense to any judge, make decisions for my children, rather than me, at least being able to make those decisions through trust.

David: And plus at the end the child will probably end up with more when they reach the appropriate age rather than because you don’t have to pay the annual attorney’s fees. The other benefit I think with trust for minors [00:05:00] is that a guardianship, with a guardianship, the guardianship for a minor’s property expires.

On the minor’s 18th birthday, when the minor turns 18, then they go in and have it discharged and distributed to the minor Now an 18-year-old may not necessarily be mature enough to handle the money. However, with proper planning, a trust can drag it out and hold it longer and have a trustee pay for their tuition and for graduate school and for weddings and allow them to receive the money at a later age. But if you are in a situation where you are the parent of a minor, or you know a minor who’s inherited a significant amount of money, or is the beneficiary of a lawsuit settlement, then you’re going to need to do a guardianship of the minor.

And that’s something that we can certainly help you with.