A minor cannot legally own inherited property that is directly left to them, so the guardian must manage the property on their behalf. The guardian is usually approved by a probate judge and appointed when they volunteer for the role, or when nominated by the executor or personal representative of the estate. The guardian is also referred to as a custodian in some states.
Investment and Management of Minor’s Assets
The court-appointed guardian will decide where the minor’s liquid assets should be held and who will be responsible for overseeing them. This could be the guardian themselves or a professional financial advisor.
Paying for the Minor’s Health, Education, and Maintenance
The court-appointed guardian will pay for the minor’s health, education, and maintenance expenses, including healthcare bills, clothing, food, school fees, summer camp, and vacations. This is usually accomplished through inherited property or assets – inherited cash or funds collected from selling inherited tangible property.
Preparing and Filing Income Tax Returns
Typically, the guardian invests the assets of the trust to generate sufficient income to meet the minor’s needs. This is likely to require the guardian to prepare and file annual income tax returns on behalf of the minor and pay any taxes that may be due. This may be required even if the investments are only earning interest.
Deciding Where the Minor Will Live
The court-appointed guardian may need to decide where the minor will reside if their parents are no longer alive, such as living in the home they inherited from them.
In most cases, parents appoint guardians for their children in their wills, a person who will take custody and care of their children in the event of the parents’ death while the children are still minors. Courts often respect their wishes unless the named person or persons are deemed unsuitable or are unwilling to take on the responsibility.
The child’s home will likely be with their physical guardian, who does not necessarily have guardianship over their inheritance as well. Guardians and custodians typically work closely together for the general benefit of the children.
Seeking Court Approval
Depending on the laws of the state in which the guardianship is established, the court-appointed guardian may be required to obtain court approval before carrying out any or all of their duties and responsibilities. For example, in Florida, the guardian must obtain court approval to sell the minor’s home if it is worth more than $15,000.
Filing Annual Court Accounts
The court-appointed guardian is usually responsible for preparing and filing a detailed account of how the minor’s assets have been bought, sold, invested, and spent each year to the court.
Ending Guardianship at the Appropriate Age
Depending on the laws of the state in which the guardianship was established, the guardian must provide a final account of the minor’s assets when they reach the age of majority, which is typically 18 or 21 years. Guardianship is then terminated, and the remaining assets are distributed to the minor’s estate, who is now an adult and legally able to manage and own their property.
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Sources:
Florida Legislature. “744.301 Natural guardians.” Accessed Oct. 10, 2021.
Source: https://www.thebalancemoney.com/what-does-a-guardian-or-conservator-of-a-minor-do-3505167
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