By: Jason T. Zandecki, Esq.
There are three main types of guardianship over a minor: Guardianship of the Person, Guardianship of the Property, or both. A Guardianship of the person is similar to a child custody case, and is an option when a minor’s parents have died, become incapacitated, or are otherwise unavailable. A guardianship of the property is required in Florida when a minor child is the beneficiary of an estate, life insurance policy, annuity, or trust in excess of $15,000. This post will focus on a guardianship of the property of a minor.
It is quite common for parents or grandparents to desire to name minor children or relatives as beneficiaries either in their will or as a pay-on-death beneficiary for a bank account or insurance policy, but many do not realize the unexpected consequences of leaving funds in excess of $15,000 to a minor child. Similarly, parents of a minor child who have inherited funds in excess of $15,000 are often shocked to learn that a guardianship is required for the funds to be released, that they must retain an attorney to file the guardianship case, and annual filings will be required until the child reaches the age of majority. However, the necessity of a guardianship can be avoided through the guidance of an experienced estate planning attorney.
A revocable living trust is a great tool to allow a minor child to inherit funds in excess of $15,000 while avoiding the necessity of a guardianship. Not only can minor children be named as beneficiaries, but the individual setting up the trust (the “Settlor”) can specify when the minor children can receive the funds upon reaching adulthood. Upon the death of the Settlor, the specified Trustee can hold or distribute the Trust funds pursuant to the instructions of the Trust.