When a minor stands to inherit or receive property from an estate, insurance settlement or judgment, a guardianship for the minor may be required.
If a standard Florida guardianship is required, the money will be held in the guardianship for the minor until the minor reaches age 18. Use of the guardianship funds will require authorization from the guardianship court. Typically, the guardianship court will authorize the distribution of funds for the care and upbringing of the minor ward, including medical care. Nevertheless, if the parents of the minor have their own assets, the guardianship court may require that the parents continue to support the minor, instead of using guardianship funds.
Although advance planning for the receipt of insurance settlements of judgments may be impossible, in the case of inheritances for minors, advance planning may be able to avoid having to incur the expense and complexity of a guardianship for the minor.
Alternatives to a Guardianship for a Minor
Leave the Inheritance in Trust. The person leaving the inheritance to the minor, instead of leaving the inheritance outright to the minor (which results in the guardianship) could instead leave the inheritance in a trust for the benefit of the minor. Not only is the oversight of the guardianship court avoided, but far more control over the inheritance can be obtained. For example, instead of releasing the inheritance to the minor at age 18, the funds could be held in further trust until the minor becomes more mature, whether that be age 21, 25, 30, or beyond.
Uniform Transfer to Minors Act. Florida law allows an account to be set up for minors. The estate planning document can specify that the inheritance shall be transferred to the UTMA account, avoiding the expense of a guardianship and the expense and complexity of having the money held in trust for the minor. The primary disadvantage is that the money must be paid to the minor upon reaching adulthood – which for any substantial amount of money is probably too young an age.
To discuss guardianships for minors in Florida, as well as alternatives to a guardianship for a minor, please contact me, Jeffrey Skatoff, at (561) 842-4868. The call is free.
