If a minor child inherits property worth more than $15,000.00, under Florida law that money must be held for their benefit by someone serving as the guardian of their property. This means that if a child’s parents pass away and leave their child an inheritance over this amount, the following will occur:
- The money will be managed by a Guardian chosen by the court, and not by someone chosen by the deceased parent;
- A court order will be necessary for any major changes in investments or any sale of assets;
- The guardianship of the property of the minor will terminate by law upon the minor turning 18 years old; and
- As soon as practicable after the child’s 18th birthday, the guardian will be required to give the child all of the property the guardian was holding for the child’s benefit, even if the guardian believes the child is not responsible enough to properly manage the property.
By failing to have an estate plan that includes a testamentary or revocable trust, the parents in this situation lose control. With proper planning, the results can be drastically different:
- The property can be managed by one or more Trustees chosen by the parent(s), whom they trust and who they believe to be fiscally responsible, diligent, and honest;
- The Trustee does not need court approval to sell assets or change investment vehicles, and can avoid the slow and costly process of a guardianship;
- The child is protected from their own lack of maturity and fiscal experience, as a trust need not terminate at 18, and therefore the child is not handed a large sum of money at the young age of 18;
- Instead, the parents can decide, by specifying in their will or trust, an age at which their child is entitled to receive certain assets and for what purposes the Trustee is allowed to distribute funds to the child before the stated age.
Having an estate plan in place can give a parent the peace of mind that even when the worst happens, their children’s financial interests will managed by someone they trust in a manner specified by the parent, and not a court; it can protect a child from receiving (and spending) a large inheritance at a young age; and it can prevent the burdens created by a guardianship. For more information on how your estate plan can protect the interests of your minor children, call Lavender Greenberg PLLC at 786-832-4694 to speak with a Miami Estate Planning attorney.
