Until recently, a family member or friend had to be appointed conservator to protect or manage property for a minor child or mentally incapacitated adult. This required expensive and time-consuming court filings, appointment of a guardian ad litem, annual accounts, filings, audits and court expenses, and public disclosure of values and finances.
Courts can now approve protective arrangements or single transactions for property of a minor child or incapacitated adult without a conservatorship. The new law can be found at Mass. General Laws, Chapter 190B, Section 5-408.
This law can be very helpful where:
- a minor or incapacitated adult recovers funds for a claim or lawsuit
- a minor or incapacitated adult inherits money or real estate
- real is to be bought, sold or mortgaged for a minor or incapacitated adult
- Money belonging to a minor or incapacitated person is to be put into a trust
Some people have powers of attorney that designated a trusted agent to manage money and property if the principal becomes senile or mentally incapacitated. However, situations often occur where the power of attorney does not allow the agent to create a new trust, or take out a reverse mortgage, or buy or sell real estate. The new law can expand the power of attorney, or give a family member or friend authority to conduct business for a minor or incapacitated adult without a conservatorship.
The court is obligated to consider the medical needs, living expenses, tax effects, financial circumstances, and life expectancy of the child or incapacitated adult, as well as the suitability of the person who will hold and manage the property. The court will appoint a guardian ad litem, usually an attorney, to protect the interests of the minor or adult. If the petition is approved, the court may require safeguards to monitor the property management as time goes by.
This new process is not available in all situations, but can often save a lot of time, expense, and public exposure of assets, and it allows the family member or friend to create a well-crafted plan to manage funds and property for a minor or adult over a long course of time.