Estate planning becomes more complex as the number of your family members, the value of your assets, and the number of different types of assets increase. One area in particular that can become a bit vague is bequeathing assets to minor children. In most states, the law has specific guidelines that will dictate how property inherited by children will be handled.
In particular, the law does not allow minor children to assume control of property they have inherited through a will. Although this legality does not apply to property that holds minimal value, it is strict regarding all other property.
What is a Property Guardian?
A property guardian, also referred to as a property manager, is someone who oversees the inheritance of minor children. Parents should look for someone who is honest and trustworthy so that their children’s rights are protected. Additionally, it is beneficial to select someone who has common sense, a financial background, or knowledge of your estate.
This individual does not need to be the personal guardian of the children. You can have two different people- one for each position. The personal guardian is the individual who takes custody of the children and sees to their daily living needs. In fact, if the parents prefer, a different property guardian can be arranged for each child.
This position can also be filled by an institution if no acceptable candidate can be found. The typical choice would be a financial institution. If the parent does not select a guardian and name him in his last will, then the court will select one for the children. Although the individual will be qualified to uphold his duties relating to this post, he often has no real connection to their children. Plus, the fee he earns might be of more importance to him than maximizing the proceeds for the minor children.
What Does a Property Guardian Do?
The property guardian is responsible for taking care of all of the aspects related to the property. In most cases, he will be responsible for managing the property in such a way that the assets can be used to provide payment for the minor children’s living expenses, medical expenses, and educational expenses if there are any. He is expected to invest wisely and perform his duties honestly as well as legally.
When is the Property Turned Over to the Minor Children?
When the minor children become of age or enter adulthood at the age of 18, in most cases, the property must be turned over to their possession. However, variations to this scenario exist such as when the will includes terms dictating the disbursement of the property to the minor children. In most cases, this will involve some type of custodial account that will remain in place until the children reach the age of 21. When more than one child is involved, this means that each child will receive control of their inheritance at a different time.
One variation to this includes the family pot trust through which the property is turned over at the time when the child reaches the age of 18. Another variation is the child’s trust which allows the parent to set the age at which he prefers the child to inherit control of his inheritance.