This is a question we get often, and our family is a good example of why one might be necessary. My kids and I were struck by an impaired driver in 2002. It was a horrible time. They both suffered traumatic brain injuries as well as many other injuries. They ended up receiving an insurance settlement from our uninsured motorist coverage. If you don’t have uninsured motorist coverage, I will take this moment to let you know that I highly recommend you consider getting some. In our case the impaired driver was driving on a suspended license and had no insurance. Therefore, all of the insurance proceeds came from our underinsured motorists’ coverage. Without it, there would have been no additional funds to help them.
I was appointed by the Court as their conservator while they were minors. The kids are grown now and doing really great. Both have graduated from college and are working in their chosen professions, so we have a happy ending. Admittedly, getting there was a long and difficult road. Here is what I would have wanted to know about minor conservatorships when I was getting appointed as one.
A conservatorship is a protective proceeding to protect, or “conserve,” a person’s money and property if the person is unable to manage their own assets and those assets are at risk of waste or dissipation. A minor is legally incapacitated and cannot manage their own affairs. A minor is a dependent of their parent and is not required to support his or herself until age 18. Therefore, if a minor receives an inheritance or personal injury settlement those funds must be placed in a conservatorship monitored by the court. When the minor turns 18 he or she can access their settlement funds. A few basics about how this works.
The most common situations a minor conservatorship is needed are: Inheritance such as, life insurance or a distribution in a probate matter.
A settlement from a personal injury or wrongful death case.
How Is a Conservator Appointed?
You have to file a petition with the Superior Court requesting to be appointed as the conservator. The petition must tell the Court who needs a conservator (the proposed protected person ie. the minor), why the appointment is necessary, what money or property is at risk and who is requesting to be appointed. If it is in the result of a legal settlement, the insurance company may provide a lawyer to set up the conservatorship. On the other hand, if it is from a probate or life insurance inheritance then the estate’s personal representative or the life insurance company will direct the parent to set up a conservatorship.
The Court case:
The case is initiated when the lawyer for the family files a petition with the court for the appointment of a conservator. After the filing of the petition, the Court will set a date and time for a hearing. The petition must tell the court who needs a conservator, who is asking to be appointed, their contact information and why a conservator is needed. Just like any other court case persons who may be affected by the appointment or who may have priority for appointment are entitled to notice of the legal action.
Who may be the conservator? Parents have priority for appointment. Although, the appointment of a parent is not required. Even though a parent has priority they must still be a qualified conservator. For example, if the parent has a criminal history, they may not be able to serve as the minor’s conservator.
What is notice and who gets it? A person entitled to notice must receive a copy of the notice of hearing and the petition that was filed. For a case involving a minor, both parents of the minor must be notified of the hearing. If the minor is over the age of fourteen, he or she must also be provided with notice of the hearing. They may also have a say in who will be the conservator.
What will happen at the hearing? The Court will take testimony about why the conservatorship is necessary, if the nominated conservator is the right person to serve, and what the nominated conservator intends to do with the minor’s funds/assets until the minor reaches the age of majority.
What happens after the hearing? If a conservator is appointed the court will sign its order approving the appointment. Then the conservator must get their letters issued from the Clerk of the Court.
A few more questions:
If the inheritance was left to the minor as a Trust asset is a conservatorship needed? Probably not, so long as there is a trustee and the assets are held in trust for the minor’s benefit.
Can the money be invested? Yes, the conservator can invest the funds or settlement funds may be placed into a structured settlement to increase payments over time.
Is it possible to use some funds during the child’s minority? Yes, but usually only for needs above and beyond the parents’ obligation to support the child. A good example is a vehicle. Parents have to provide for their child’s daily support, but they are not required to provide a car to the minor. The settlement funds were likely put to in a restricted account from which no withdrawals can be made without court approval and a request will need to be made to the court to release the funds to make the purchase.
If the child has special needs, can you obtain the settlement and still maintain benefits? Absolutely, the settlement can be placed into a special needs trust so the minor can receive government benefits and have these additional funds to meet needs not covered by the government benefits.
What happens when the minor turns 18? If the settlement is not in a structured settlement or a special needs trust it is pretty simple. A petition to release the funds is filed with the court, a hearing is held, and the Judge wishes the minor the best.
I read that a conservator must file an inventory, budget and accounting. Is that the same for a minor conservatorship? There are many requirements for a conservator of an adult that may be waived in the case of a minor.
I hope this was helpful. We have more information on our website, our blog and YouTube Channel.
Written by: Jennifer Kupiszewski, Esq.
The lawyer disclaimer: We hope you find this informative, but it is not legal advice. You should consult your own attorney, who can review your specific situation and account for variations in state law and local practices. Laws and regulations are constantly changing, so the longer it has been since this was written, the greater the likelihood that the information might be out of date.
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