8.2 Minor Children

• Library: Estate Planning in Virginia (Virginia CLE) (2018 Ed.)

8.2 MINOR CHILDREN

8.201 Introduction. Planning for clients with minor children can present some of the most interesting and challenging tax and non-tax issues to be found in estate planning. The challenges originate from the legal restrictions on ownership of property by a minor and, in addition, often arise from the client's desire to make lifetime gifts or bequests at death to the minor but to defer the minor's actual possession of the gifted property until the minor reaches at least the age of majority.

Unlike planning for most other beneficiaries, planning for minors also involves planning for the custody of the person of the minor. Such plans could be drafted to apply across a broad spectrum of contingencies, addressing everything from a situation in which both of the minor's parents are temporarily unavailable to circumstances in which both parents die before the minor reaches the legal age of majority.

8.202 Choosing a Guardian.

A. Introduction. When representing a client with minor children, it is imperative to discuss with the client the need to appoint a guardian for the person of the children. In the typical case, the attorney represents a married couple with minor children and the discussion focuses on the need to appoint a guardian for the person of the children if both parents die while one or more of the children are still minors.

Once appointed, a guardian for the person of a minor child becomes, in effect, a substitute parent for the child. The guardian not only is responsible for the basic life-sustaining needs of the child (food, clothing, and shelter) but also has a significant impact on the value system developed by the child, on the religious beliefs of the child, on the child's educational progress and, in general, on the development of the child to adulthood. Especially for children who have lost both of their parents at a young age, such guidance is critical. Consequently, the client must give careful consideration to the choice of guardian (both the primary guardian and successor guardians) and must discuss the prospect of the guardianship with those nominated.

It is important to distinguish between the need for a guardian for the person of the children and the need for a guardian for the property of the children. With proper planning, the appointment of a guardian for the property of a minor is typically not needed and is usually not desired because

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there are many more flexible arrangements for holding property for the benefit of a minor.

B. Guardian for the Person: Statutory Authority.

1. Natural Guardians. Section 64.2-1700 of the Virginia Code creates a presumption that the natural mother and father of every unmarried minor child are the joint natural guardians of the person of that child. This presumption only remains in effect if the parents of the child are (i) living together; (ii) "respectively competent to transact their own business"; and (iii) "not otherwise unsuitable." The statute is clear in that the presumption applies only to the person, not the property, of the minor child.

Section 64.2-1700 further provides that upon the death of one of the parents, the surviving parent is the sole natural guardian of the person of the child if these three conditions are met. If a parent has abandoned the family, the statute states that the other parent is the natural guardian of the person of the child.

In a divorce situation in which one parent has been awarded custody of the minor child, the Virginia Supreme Court has held that the death of the custodial parent results in a transfer of custody to the surviving parent unless the surviving parent is shown to be unsuitable. ¹¹⁷ Virginia's juvenile courts and circuit courts share jurisdiction to determine what custody arrangement is in the best interests of the children if objections are raised to the fitness of the guardian appointed by a parent's will. ¹¹⁸

2. Testamentary Guardians. Section 64.2-1701(A) of the Virginia Code authorizes every parent to appoint a guardian for the person of his or her minor child by will. ¹¹⁹ If upon the death of one parent the other parent is living and is a "fit and proper person to have custody" of the minor child, the surviving parent (and not the guardian appointed by will) is

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entitled to custody of the person of the minor child. ¹²⁰ This entitlement does not extend to the property of the minor child. ¹²¹

If a testamentary guardian renounces his or her appointment or fails to qualify within six months after the date the will is admitted to probate, the appointment is void. ¹²² A testamentary guardian qualifies in the court where the will is "proved," which may not be the court of the city or county in which the minor resides. This distinguishes the qualification of a testamentary guardian from that of a guardian appointed by the court.

3. Appointment by Court. If a guardian is not appointed by the minor's parents, the circuit court of the county or city in which the minor resides has jurisdiction to appoint a guardian for the minor. ¹²³ If the minor does not reside in Virginia, the circuit court for the city or county in which the minor has property has jurisdiction over the appointment. ¹²⁴ The clerk of court may also appoint a guardian for a minor (although in practice this is rarely done). ¹²⁵

If the minor is 14 years of age or older, the minor may nominate his or her own guardian in a notarized writing or by appearing in court for that purpose. ¹²⁶ If the person nominated by the minor is not "deemed suitable or competent" by the clerk or judge making the appointment, a guardian is nominated and appointed in the same manner as if the minor were under the age of 14. ¹²⁷

A person not related to the minor cannot be appointed guardian for the minor until at least 30 days have elapsed since the death or disqualification of the natural or testamentary guardians and the next of kin have had an opportunity to petition the court for appointment. ¹²⁸ The

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Virginia Code does not define the phrases "related to the minor" or "next of kin," nor does it explain what kind or how much of an opportunity must be given to the next of kin to petition the court for appointment. From a practical standpoint, anyone who is not an immediate blood relative of the minor (admittedly also a phrase open to interpretation) will probably have to show the court that all of the immediate blood relatives of the minor affirmatively decline to petition the court for appointment. This can usually be accomplished to the satisfaction of the court by a notarized written statement to that effect from all the immediate blood relatives who can be located.

Section 64.2-1704(A) of the Virginia Code specifies that only the guardian for the estate of a minor must post a bond, presumably because an individual appointed guardian solely for the person of a minor does not have any legal authority over the property of the minor.

Unless the guardian first dies, resigns, or is removed, the guardianship terminates when the minor reaches 18 years of age. ¹²⁹

C. Guardian for Property: Statutory Authority.

1. In General. Section 64.2-1700 of the Virginia Code designates the mother and father of a minor child as the joint natural guardians of the person of the minor but makes no mention of "natural" guardians of the property or estate of a minor. This means, in effect, that even the natural mother or father of a minor has to be appointed by a court as the guardian of the property of a minor if a court appointment is necessary for the receipt of property on behalf of a minor. ¹³⁰ Such appointment is necessary when assets such as insurance proceeds or retirement benefits are payable directly to a minor, since a prudent payor of such benefits, such as the insurance company

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or retirement plan administrator, will not distribute the benefits to anyone other than a court-appointed guardian. ¹³¹

If a guardian is appointed for a minor's estate, that guardian will also have custody of the person of the minor unless the natural parents are alive and fit to serve or a guardian for the person has been appointed by a parent or the court. ¹³²

2. Testamentary Guardians. Section 64.2-1701(A) of the Virginia Code authorizes every parent to appoint a guardian for the estate bequeathed by the parent to his or her minor child "for such time during the minor's infancy as the parent directs." This appointment is effective even if the other naturalThis appointment is effective even if the other natural

parent is surviving. ¹³³

If a testamentary guardian renounces his or her appointment or fails to qualify within six months after the date the will is admitted to probate, the appointment is void. ¹³⁴ As is the case when a testamentary guardian is appointed for the person of a minor, a testamentary guardian of the estate of a minor qualifies in the court where the will is "proved," which may not be the court of the city or county in which the minor resides.

3. Appointment by Court. The provisions above discussing court appointment of a guardian for the person of a minor also generally apply to court appointment of a guardian for the estate of a minor. ¹³⁵ But section 64.2-1704(A) of the Virginia Code specifies that a guardian for the estate of a minor must post a bond "in an amount at least equal to the full value of the minor's personal estate coming under his control." The guardian must also provide surety on the bond unless: (i) the value of the property under the control of the guardian does not exceed $25,000, in which case the exception from surety provided by section 64.2-1411 of the Virginia Code applies; or (ii) in the case of a testamentary guardian, the will waives

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surety. ¹³⁶ When the same guardian qualifies upon the estate of two or more wards who are members of the same family, only one qualification and one bond are required. ¹³⁷

A guardian of an estate must file an inventory with the...