Guardian Vs. Custodian of a Minor Child in a Will

A guardian and custodian become necessary in the event a child's parents pass away, leaving assets and an inheritance behind. Minor children cannot inherit money or assets outright, so a custodian is named or appointed to manage the assets until the child reaches an appropriate age. A guardian, in contrast, is responsible for overseeing the child's day-to-day physical and financial well-being. These positions may be named in a parent's will or appointed by the court.

The guardian of a minor child fulfills the role of a substitute parent. The guardian maintains physical and legal custody of the child, helps the child with daily tasks and makes financial and medical decisions on the child's behalf. When choosing a guardian, make certain the person you choose is comfortable with the appointment. In most jurisdictions, the court must approve the choice of guardian in the event both parents die or are unable to care for the child. If both parents die and did not leave a will or appoint a guardian, the court will appoint one for the children. If one parent dies naming someone other than the surviving parent as guardian, the court can override the appointment if it is in the child's best interests.

A custodian is also appointed by will, but serves a different role than the guardian. The custodian is responsible for managing, overseeing and protecting any inheritance received by a minor child until the child reaches an appropriate age. If no age is provided in the will, the custodian can release the assets when the child turns 18, 21 or 25, depending on the jurisdiction. Some wills require the custodian to wait until the child is older or a specific event occurs, such as the child's college graduation. The same person can serve as custodian and guardian.

The Uniform Transfers to Minors Act is a model law that has been adopted by almost every state and the District of Columbia to help control the transfer of assets to minors. Under the UTMA, parents can choose an adult custodian to manage property or specific accounts inherited by a minor child. Prior to UTMA, custodians were required to obtain court approval for any actions taken regarding any accounts or inheritances held for the child. Since UTMA, custodians are permitted to make financial decisions for the child without seeking approval, provided the decisions are in the child's best financial interest. This statute shifts the custodian's loyalty to the child as opposed to the court. Accounts set up under UTMA can hold nearly any kind of asset, including real estate.

In the event a minor child is left without parents, the court will appoint a property custodian to manage the child's assets. The court will review the child's family situation to determine the best person for each job. Factors considered include a person's geographic location, employment, stability and willingness to take on the role. Some jurisdictions refer to this role as a conservator. The court can also appoint co-custodians in the event it will be necessary for more than one person to handle this role.