What happens to property passing in intestacy to a minor child?
Where the beneficiary of an estate is a minor child, the court will appoint a guardian to manage the child’s property. This court-appointed guardianship is generally more cumbersome and more expensive than the creation of a minor’s trust under a well-drafted estate plan. Court-appointed guardians are selected by the court and guardianships end when the child reaches age 18, regardless of the ability of the child to manage the amount of money involved. Court-appointed guardians may only make expenditures for the “health, education, maintenance, and support” of the child. A guardian must always obtain approval from a judicial officer prior to the sale of a minor’s interest in real estate. A guardian must have the approval of a judicial officer for any distribution made to the child if the child has a living parent. Two forms of “insurance” – surety upon the guardian’s official bond and annual accountings to the commissioner of accounts – cannot be waived under a court-appointed guardianship. Though surety and annual accountings may be desirable in certain circumstances, they may prove expensive and are not useful under many circumstances. A minor’s trust fund may be tailored to specifically meet his/her needs and may lower administration costs.