In Virginia, there are stipulations that come with leaving an estate in the care of a minor.
A Virginia minor property guardianship is a role established to help the minor beneficiary.
The guardian of a Virginia minor’s property manages their inherited estate until they are of age and able to manage it as an adult.
However, it is a role that comes with many rules and responsibilities.
Knowing the implications of the position is critical to deciding who will be named for the responsibility.
You may also be wondering whether or not you are cut out for the position bequeathed to you.
What follows are a few things you should know about Virginia minor property guardianship.
Minor Property Guardianship Responsibilities
Being named a guardian is a big responsibility, both legally and financially.
A guardian’s bond is the legal process of accepting minor property guardianship.
You must appear in court to take the officiated oath.
The oath is your promise to “faithfully” and responsibly perform the required duties that guardianship entails.
The guardian’s bond is also financial reassurance of your responsible management.
After accepting the position, you must post a bond at least equal to the value of the minor estate that you are managing.
This financial insurance is called “surety,” and it is required for guardianship of an estate surpassing $25,000 in Virginia.
However, there are exceptions to the Virginia surety requirement.
- If the estate does not exceed the $25,000 total value threshold, you are not required to pay surety on the estate.
- If paired with a bank or other financial institution by the trustor to manage the trust property, you are exempt from paying surety.
- If the trustor has included a waiver of surety on your behalf in the trust documents, you are exempt from paying surety.
- If the court issues certification of guardianship that is equal to only $25,000 or less of the total estate, you are exempt from surety.
When you are managing the estate of multiple inheritors, you are only required to pay one bond on the estate.
This bond is not a set sum payment.
By your request as the guardian, the bond can be adjusted to match the market value of the estate, which may decrease over time due to the distribution and disbursement of estate assets.
Temporary minor property guardians are still required to give bond.
However, if they meet the above requirements, they will qualify for bond exemption.
Parental Duty of Support
Although guardianship comes with authority over the minor property and inherited estate, it also comes with regulations.
If there is a living parent, you cannot distribute the estate or income unless:
- You have been authorized by the estate “instrument” (or document) to distribute the estate or income.
- There is court authorization, finding: the parent(s) incompetent, the parent(s) unable to provide support to the minor, or that the distribution is ruled beyond a parental duty required by you (on a case-by-case determination).
If you intend to distribute the estate in a manner that is unauthorized by the estate documents, you must legally petition.
The petition is filed with the court and the minor becomes the defendant of the estate.
If the ward is 14 years-old or over, you must provide 5 days notice prior to filing the petition with the court.
Any court fees accrued as a result of the petition will be absorbed by the estate, unless the court decides it should be assumed by you.
You are able to access the estate assets in the case of an emergency regarding the minor.
Additionally, emergency access to assets does not require intervention of a guardian ad litem.
Limited authority of commissioner of accounts
The authority of the commissioner of accounts is limited in making decisions regarding the guardian of minor property, but still present.
A commissioner of accounts acts as a general supervisor to ensure that you are following court appointed regulations.
Although they are able to make authorizations on behalf of the circuit court, they are still limited by commissioner’s restrictions.
For example, the total authorized distribution of an account under the authority of the commissioner of accounts is $5,000.
Additionally, the commissioner of accounts must fully explain any unauthorized distributions with sufficient evidence of necessity (i.e. medical emergency).
Virginia Minor Property Guardianship Authority
The Virginia Code offers a list of guardian rights and responsibilities.
Protecting Assets from the Beneficiary
As the guardian of the estate, you have the ability to admit or dismiss a contract entered into by the minor estate holder.
This power prevents the minor from making executive decisions offering estate collateral that would put the trust at risk.
The minor is able to make contractual requests regarding the assets of the estate, however, it is your responsibility to fiscally manage the estate.
Guardianship may include turning down minor requests for the benefit of the overall estate.
Since there are limited ways you can contribute to the estate, you have the ability to distribute any beneficial sum to the ward directly.
Alternatively, you are able to pay sums directly to those providing the goods and services that are essential to the care of the minor.
As a minor property guardian, your first responsibility is the management and protection of the estate on behalf of the minor beneficiary.
However, you are still subject to protecting the minor’s physical well-being via the estate.
Things such as maintaining life, health, casualty, and liability insurance on behalf of the minor are an attribute of Virginia minor property guardianship.
Once your guardianship has been terminated due to age of the minor, or term conclusion set by the will or trust, it is still under your management.
You manage the estate until the minor beneficiary is legally eligible to receive it (typically determined by age).
It is your responsibility to execute and/or to deliver all trust documents to the beneficiary.
You must keep open contact with the commissioner of accounts and circuit court clerk, and when necessary, deliver copies of relevant documents to them for the trust record.
You are also required to take any actions regarding the trust that will best serve the overall interest of the minor’s estate.
Not only are you managing the minor’s estate, but you are able to authorize the minor’s ability to borrow money from the estate.
If a bank is named as the guardian, the minor can request authorization to borrow money from that lender.
You are also able to use the minor’s estate as collateral against the minor’s mortgage, loans, or other authorized debts.
If you seek to accrue interest from the real estate in the trust, you are subject to:
- an increase in the surety of your guardian’s bond
- a secured appraisal of the real estate property and/or the interest
- providing notice to interested parties
- consulting all decisions with the commissioner of accounts before finalizing any transactions on behalf of the minor and the minor’s estate
Although guardianship is generally a position named to a particular person, it is not a legally binding inheritance.
You are able to irrevocably disclaim any of the above-mentioned powers of guardianship.
However, this disclaimer is legally binding upon the appointment of a new guardian.
Relationship to Commissioner of Accounts
The guardian of the minor’s estate hold a co-administrative relationship in which communication is key.
If the commissioner of accounts establishes requirements, those requirements must be met.
You must file with the commissioner of accounts as proof of compliance to all established requirements.
The commissioner of accounts must confirm that you have fulfilled all requirements over the course of the guardianship.
However, if the commissioner does not establish any requirements, there must be documentation to approve the lack of requirements.
Although you are the legal entity acting on behalf of the minor and the estate, it is a role that is still governed by the circuit court of that jurisdiction. The court will retain the powers to:
- hear and judge matters that arise between you and the minor, regarding the estate
- require you to settle your accounts, in relation to the estate
- remove you, if it is found that you are inadequate on the basis of neglect, a breach of the trust agreement, or in able to appoint a new guardian
- order the “custody, health, maintenance, education, and support”  of the minor
- manage, disburse, preserve, and/or invest the inherited estate of the minor
Ultimately, you are limited to the power that the court appoints, and you are subject to the court’s regulations and restrictions.
Termination of Guardianship
When you are appointed, you hold the power of property guardianship until the child ages out (as determined by the trust documents), or until death (if before the child ages out).
The age of a minor varies by state.
In Virginia, the age of a minor is limited to age 18, but can be extended under particular circumstances (i.e. an irresponsible beneficiary).
However, the trustor can bypass Virginia legislation that governs minor ownership of property by extending your term of guardianship.
For example, if the beneficiary cannot be entrusted to efficiently manage the estate into early adulthood, the trustor can set an age limit that the beneficiary must exceed before claiming the property from you.
Until that limit is met, you remain the managing entity of that estate.
Once that age is reached or exceeded, your guardianship is terminated.
Upon termination, you are required to deliver all of the estate and assets to the beneficiary.
Although a Virginia minor property guardianship is a hefty legal and financial obligation, it is a rewarding experience.
Protecting the estate of a minor until they are able to receive the inheritance is beneficial to the trustor and the beneficiary.
If you are named a guardian, or if you are planning your will or trust and are interested in naming a guardian to handle your minor’s estate, schedule a consultation with our estate planning attorney.