What happens when a minor child receives an inheritance? Can life insurance proceeds just be given to a minor child’s parent for safekeeping, or is court action necessary? What if a minor is a payable on death beneficiary of an account?
I am frequently contacted by parents with questions such as these. My answer is usually “it depends”. Typically, it depends on the amount of money the minor child is expected to receive.
If it $5,000.00 or less, then a parent or guardian of the child can typically just receive the payment directly and manage it on behalf of the child. The details can be found in Minn. Stat. 524.5-104. Note that the person receiving the money must use it for the care, support, education and health of the minor.
If it is more than $5,000.00, typically a “conservator” must be appointed for the minor. This involves going to court. It is usually a routine matter, but it is important that the court rules regarding the petition, notice to interested persons and background checks be followed. Depending on the county that you are filing your papers in, the process can take as long as 8 weeks. Many people find it beneficial to have a lawyer involved in the process. If you do not have a lawyer, you will still be expected to follow all of the rules of court that the lawyers need to follow.