If your estate plan includes a minor-aged child, you will need to appoint an adult to oversee the inheritance. Those under the age of majority cannot inherit property (and that means anything from cash to a car), so a conservator or guardian appointment is a necessary step in your complete estate plan. In most cases, that role falls to the child's parents but not always. Read on to find out more about appointing a conservator for your estate plan.
The Tasks of a Conservator
To better choose a conservator, it might be helpful to understand what is expected of one. The below tasks are commonly expected of conservators.
Paying for Needed Expenses — If the parents of the minor child are living and able to financially attend to the child, some of the below won't be necessary. Conservators are expected to pay the living expenses of a minor child, such as clothing, education, medical care, food, travel, recreation and sports, and more. If an inherited asset is not liquid, the conservator has the power to sell it to use the cash for these needs. Even if a parent is caring for the day-to-day expenses of the child, the money from an inheritance can be used for expensive outlays like a European vacation, a car, or expensive private school tuition.
Living Arrangements — If the minor's parents are not available to provide a home, this becomes the conservator's job to do so. While the conservator does not necessarily have to let the child reside with them, many end up doing so. Otherwise, the probate court will appoint someone to be the child's guardian. Many parents appoint a guardian for their child in their wills, however.
Managing Assets — Liquid assets must be held in a court-approved manner. Depending on the amount, some conservators must consult with a financial advisor when deciding how to invest the minor's funds in a safe and appropriate manner. Any real estate owned by the minor must be maintained, which means the conservator should pay the property taxes, mortgage, homeowner's insurance, and other maintenance needs.
Filing Taxes — In many cases, the assets of the minor will produce interest or income. It is the conservator's job to file and pay any income tax owed on those assets.
Accounting Records — Each year, the conservator is expected to file a detailed report with the probate court that lists all actions. That means all money spent, property sold, taxes paid, and more.
In most cases, the conservatorship ends when the child reaches the age of majority, which is 18 or 21 in most cases. To find out more about this facet of estate planning, speak to an estate planning attorney.
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