A “minor” is anyone who has not reached the age of 18. Minors are not allowed to directly own or control assets. When a minor child is the recipient of assets (gifts, settlements, judgments, etc.) that are not transferred by a trust or under the Uniform Transfers to Minors Act, a guardianship estate needs to be opened in order to transfer the assets to a guardianship estate for the minor. This is true even if the minor has one or both parents still living.
At Huck Bouma, we have extensive experience working with minors. We can assist you in negotiating the legal process and then complying with the ongoing court and accounting requirements.
While good planning can eliminate the need for a guardianship for a minor, oftentimes a guardianship for a minor cannot be avoided. At those times we work with our clients to establish the guardianship and administer the minor’s estate as efficiently as possible.
Short-Term Guardianship for a Minor
Illinois law allows a parent or a court-appointed guardian of a minor child to appoint a responsible adult other than the parent to serve as a short-term “guardian of the person” for a minor child. Unless the terms of the document provide otherwise, a short-term guardianship appointment may remain in effect for 365 days.
The short-term guardianship is a useful “vacation” tool or technique for any period during which a parent will be away from his or her child for a short period of time. The short-term guardian has authority to act as Guardian of the Person of the minor but does not have authority to act as Guardian of the Estate of a minor; in other words, the short-term guardian cannot make financial decisions for the child.
Uniform Transfers to Minors Act
Transfers of assets to minors can also be made under the Illinois Uniform Transfers to Minors Act. The Act allows the transfer to be made to a custodian for the benefit of the minor. However, when the minor reaches the age of either 21 (in the case of gift transfers) or 18 (for some other types of transfers by a fiduciary), the custodianship terminates and the child holds title in his or her own name and can take possession of the assets being held. It is generally not recommended that large amounts of assets be transferred to this “statutory trust” for that reason (Section 2503(C) Trusts, Irrevocable Crummey Gift Trusts and other vehicles are usually more appropriate under those circumstances).
Please consult one of our attorneys as to the options available when a minor is the recipient of assets or when considering the transfer of funds to a minor so we can help guide you through the process.