Elsewhere on this website we have an article about the PA Uniform Transfers to Minors Act (PAUTMA), which is a good vehicle for people who want to give gifts or transfer property to minors without going through the expense and formality of setting up a formal trust, and without the rigors of too much court oversight. There are also ways to make sure that both custody issues and money issues involving minors are taken care of on the death of a parent. One method allowed by the Pennsylvania legislature is “testamentary guardianship.”
The Pennsylvania Estate Law, otherwise knows as the Decedents, Estates, and Fiduciaries Code, at § 2519 spells out the right of a person to nominate a testamentary guardian for a minor, which is a guardian appointed by will. Only a sole surviving parent can nominate a “guardian of the person” of a child. We can think of guardianship of the person as who has custody of the child, who decides where the child will live, what religion the child will be raised into, what medical treatment the child should receive, and all the myriad day-to-day decision making that parents usually perform.
While only a parent can nominate the guardian of the person of a child, anyone can nominate a “guardian of the estate” of a child. Section 2519(b) provides that any person may, by will, appoint a guardian of real or personal property passing to a minor upon the testator’s death under various circumstances. These include situations where the property passes to the minor by the testator’s will, is the proceeds of insurance on the testator’s life, arises from a lifetime gift by the testator to the minor, is a cause of action arising by reason of the testator’s death, is a pension or death benefit, or is a tentative trust of which the testator was the settlor.
Together, these powers have many beneficial uses. Pennsylvania estate planning lawyers are often called upon to write a will for a parent who does not want to see the other parent get their hands on the child’s money after the former is gone. The nomination of a guardian of the estate allows any property passing to the minor from the decedent’s estate to pass to the guardian, keeping it away from the surviving parent. Furthermore, even though the appointment of a testamentary guardian of the person is specifically only valid when made by the “sole surviving parent,” a parent may attempt to appoint a guardian of the person for his or her child even through the other parent is living. There is some case law that suggests that the preference of the decedent will be given some weight by the courts, even if the statute doesn’t technically apply, because the court is always interested in the best interest of the child, and obviously the deceased parent did not think it would be in the best interest of the child to be with the surviving parent.
The law is somewhat unsettled as to whether a testamentary guardian in Pennsylvania can exercise guardianship powers immediately upon the death of the testator, or whether the person nominated must have the nomination confirmed by a Pennsylvania court before the appointment can become effective. There is very little case law on this question over the past century. Recently, the Pennsylvania Superior Court in In re Slaughter, 738 A.2d 1013 (Pa.Super. 1999) suggested that the person nominated as guardian enjoys a presumption of legitimacy which is binding unless it is successfully challenged in court. Practically speaking, however, a testamentary guardian might need proof of her guardianship to take to doctors, schools, and the like, and therefore it is good practice to petition the court to have the testamentary guardianship confirmed.
A guardian, unlike a trustee, does not take legal title to the property of beneficiaries, but acts merely as a custodian or manager, subject to the direction of the court. The minor (also known as the “ward”) remains the owner of the property. Within three months after real or personal property of his ward comes into his possession, the guardian must file an inventory and appraisement of the property with the court, and a statement of any real or personal estate which he expects to acquire thereafter. 20 Pa.C.S.A. § 5142. A guardian may be required to file an accounting to the court at any time. 20 Pa.C.S.A. § 5161.
The powers and duties of guardians are complex. Their responsibilities are numerous. Good planning is essential to making sure that your children are taken care of after you are gone, and good advice is required if you are required to discharge your duty as a guardian. Whether setting up an estate plan, or following through on a plan set in place years ago, it is wise to seek legal counsel for expert advice.
Over the past thirty years, the lawyers of Wolf, Baldwin & Associates, P.C. have worked on thousands of estate plans, and have advised numerous guardians. We have counseled many of your friends and neighbors in Montgomery County, Berks County, and Chester County. Please consider the estate planning attorneys at Wolf, Baldwin & Associates, P.C. when you plan for the future. Remember, we strive for “Peace of Mind.”
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