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Appointing a Legal Guardian and Managing a Minor鈥檚 Property

A proposed guardian must petition to be appointed to manage the property of the minor. Parents are not automatically empowered to act as guardian and must still petition the Court. If the Court finds the proposed guardian suitable, the guardian receives Letters of Guardianship over the minor鈥檚 property. Once appointed, the guardian must establish a trust which owns the minor鈥檚 property.

Dealing with the Court does not stop there. When the guardian wants to withdraw funds for the minor鈥檚 use, they must petition the Court for approval. Guardians are also responsible for annually accounting to the Court.

Guardian Bonds: Protecting a Minor鈥檚 Assets

Most guardians must be bonded; it is a protective mechanism the Court employs to prevent property mismanagement. The Court issues an order specifying the bond amount. To be bonded, the guardian must contact a聽surety company,聽which will assess their financial stability and determine the premium due. Ultimately, is it up to the Court鈥檚 discretion regarding the bond requirement.

Subtrusts: Structuring Inheritances for Minors

Whether you decide to plan through a last will and testament, revocable trust or irrevocable trust, the minor beneficiaries can inherit in further trust, through a 鈥渟ubtrust.鈥�

If you are naming the minor as a beneficiary of an asset directly with the financial institution, often done with retirement accounts, then you must make sure that you are naming the trust for the benefit of the minor as beneficiary. Beneficiary designations override Will or trust terms so you must be sure your attorney and financial advisors are on the same page every step of the way.

In drafting the documents, you can determine who will serve as trustee and at what age the beneficiary can act as their own trustee to manage the assets on their own.

Planning Ahead Helps Avoid Headaches

Proper planning prevents delays and costs associated with appointing a guardian to manage a minor鈥檚 inheritance. If the appointment of a guardian for the benefit of a minor beneficiary does not scare you, you can abstain from the creation of a trust for minor beneficiaries, but beware鈥� headaches will almost certainly await those who survive you.

By Britt Burner, Esq. and Erin Cullen, Esq.

Britt Burner, Esq. is a Managing Partner, and Erin Cullen, Esq. is an Associate Attorney at 明星黑料, P.C. 明星黑料, P.C. serves clients from New York City to the east end of Long Island with offices located in East Setauket, Westhampton Beach, Manhattan, and East Hampton.