A minor can't legally take ownership of inherited property that is left to them directly, so a conservator within your estate must manage the property for them. A court-appointed conservator is typically approved and appointed by the probate judge when they volunteer for the job, or when the executor or personal representative of the estate nominates them. A conservator is also called a guardian in some states.
A conservator will have numerous duties and responsibilities, depending on whether the minor's parents are still living. The court will generally appoint a child's parent as the conservator of their property provided the parent is capable of taking on the responsibility—they are not incarcerated or otherwise unsuitable. Below are several roles that a conservator or guardian may take.
Investing and Managing the Minor's Assets
The court-appointed conservator will decide where the minor's liquid assets should be held and who will be responsible for overseeing their investment. It might be the conservator themselves, or a professional financial adviser.
If the minor inherits real estate, the conservator will be responsible for paying all expenses of maintaining the property, such as taxes, mortgages, and insurance.
Paying for the Minor's Health, Education, and Maintenance
The court-appointed conservator will pay for the health, education, and maintenance of the minor, including medical bills, clothing, food, school tuition, summer camp, and vacations. It is typically accomplished through the inherited asset or assets—cash inherited or money raised from the liquidation of tangible inherited property.
Of course, this isn't a consideration when the minor's parents are living, and they are receiving support from them, but the inheritance may be tapped into for purposes of paying for more costly needs and extras, such as college, a computer or a car when they are old enough to drive.
Preparing and Filing Income Tax Returns
The conservatorship estate assets are typically invested to produce income sufficient to take care of the minor's needs. It most likely requires that the conservator must prepare and file a yearly income tax return on behalf of the minor and pay any taxes that may be due. It may be required even if the investments only earn interest.
Deciding Where the Minor Will Live
The court-appointed conservator may have to decide where the minor will live if their parents are no longer living, such as in the home they inherited from them.
In most cases, parents name guardians for their children in their wills, someone to take custody and care of their them should the parents die while children are still minors. Courts often honor their wishes unless the person or persons named are unsuitable or don't want the responsibility.
The child's home would most likely be with their physical guardian, who does not necessarily also have conservatorship over their inheritance. Guardians and conservators usually work closely with each other for the children's overall benefit.
Asking for Court Approval
Depending on the laws of the state where the conservatorship has been established, a court-appointed conservator may be required to obtain court approval before carrying out any or all of his duties and responsibilities. For example, a conservator must get court approval to sell the minor's home in Florida if it is worth more than $15,000.
Filing Annual Court Accountings
A court-appointed conservator is typically responsible for preparing and filing with the court a detailed accounting of how the minor's assets have been bought, sold, invested, and spent each year.
Terminating the Conservatorship at the Appropriate Age
Depending on the laws of the state where the conservatorship has been established, a conservator must file a final accounting of the minor's assets when the minor reaches the age of majority, usually 18 or 21. The conservatorship is then terminated, and the remaining assets are distributed to the ownership of the minor, now an adult and legally able to hold and own their property.