How to save lots of Legal Fees when your minor child inherits property
In probate situations where the decedent did had an overly simple will that does not contain proper trust provisions or other cost effective alternatives for the executor, or where the decedent died without a will, and where there are minor children who are to receive property, most lawyers think the only alternative is advise the client to implement a court ordered guardianship for the minor which, in Texas, is prohibitively expensive.
The Texas Property Code contains a unique alternative to a guardianship that not everyone is familiar with but can save clients many thousands of dollars in legal fees. The Property Code provides that if property vests outright in a minor, an executor or personal representative may deliver the property to a custodian for the minor under the Texas Uniform Transfers to Minors Act, TEX. PROPERTY CODE § 141.001 et seq or, as an alternative to delivering the property to the minor’s court appointed guardian
The Texas Uniform Transfers to Minors Act provides that the legal representative of a decedent’s estate who has received letters may pay or transfer to a custodian for the minor property if the representative believes the distribution to be in the best interest of minor, and the same is not expressly forbidden by will, court order, or other instrument governing disposition.
Almost anything can be deposited with a custodian under the Texas Uniform Transfers to Minors Act: money, personal property, securities, a life insurance policy or annuity contract, and even real property. The legal representative shall designate an adult member of the minor’s family or a guardian to serve as custodian. The legal representative is treated as the donor under the act. The powers of the custodian to use the property for the minor’s benefit are fairly broad. The custodian shall collect, hold, manage, invest, and reinvest the custodial property. Upon the minor’s attainment of the age of 18, the property must be distributed to him.
Probate Court approval is required when the value of the distribution exceeds $10,000, but this simple procedure of getting court approval is a fraction of the cost of the court ordered and supervised guardianship in Guardianship Court that so many people find themselves under when it was avoidable at the outset if the executor or personal representative had simply been aware of his options under the Texas Uniform Transfers to Minors Act.