What Happens if a Minor Child Receives an Inheritance and the Parents Are Divorced?

If your child receives a substantial inheritance while she is still a minor, she must wait until the age of majority to take possession of it. Although many people assume that one or both parents hold a minor child's property until she comes of age, this is only the case for smaller amounts of money.

Someone making a will can leave property to persons of any age -- even to persons as yet unborn. The beneficiary's age only is important to determine when the beneficiary gains legal control over the property. Generally, a child cannot own and control property until she reaches the age of majority. This generally happens when she turns 18 years old or 21 years old, depending on your state. This rule is unaffected by whether the child's parents remain together or have divorced.

Your child inherits money or property if she is named a beneficiary of someone's will and that person dies. The will is generally filed in court by the executor to begin the court-supervised administration of the estate, termed probate. The probate court will not allow the executor to simply write a check to your child for the money. Rather, the money must be held by an adult appointed to act as guardian for the minor's property. In some states, like California, if the inheritance is under $5,000, it may be held by a parent for the child until she turns 18. If the parents are divorced, the money would be held by the parent with legal custody.

Read More: How Do I File for Legal Guardianship of a Minor?

It is possible that the person who left money to your minor child named a guardian, also called guardian ad litem, to control her share of the inheritance. If so, the probate court will most likely approve the appointment of that person as guardian. If the will fails to name a guardian, the probate judge will choose someone to hold the property until your child reaches majority. While it is possible that the court will appoint one of the child's parents, this is not always the case. If the parents are divorced, the court may opt to appoint the parent with legal custody of the minor.

Most states have adopted a model law called the Uniform Transfers to Minors Act. Under the provisions of UTMA, a person making a will can choose a custodian to safeguard any money or property left to a minor. If the child inherits while still a minor, the named custodian takes charge until the minor reaches majority. There are no special requirements to set up a custodianship. You simply state in your will that you are leaving the property to the named adult as custodian for the child under the Uniform Transfers to Minors Act.