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Guardianship Laws FAQ: When Is Guardianship Necessary?

If you're caring for a child, you may not have considered establishing a legal guardianship, but it's an important step towards ensuring that the laws work for you in protecting the child's best interest. These frequently asked questions cover issues related to when you do and do not need to establish a guardianship.

I have a child living with me currently, and I'm providing all of his care -- should I establish a guardianship?

It depends on how long you plan to care for the child. If the child is only going to live with you for a short time -- a few weeks or months -- then a guardianship is probably unnecessary. Any longer than that and you should probably consider a guardianship. With a guardianship in place, you will have a much easier time handling certain tasks on the child's behalf, such as enrolling him in school, obtaining medical care and registering for benefits.

Plus, without a guardianship, you will have no argument if his parent attempt to regain custody of him, even if you think that they are unfit parents. There's no guarantee that a guardianship will allow you to continue caring for the child if his parent want him back, but it definitely improves the odds.

I've heard that parents sometimes have to establish guardianships over their own children's property. Is that true?

Strangely enough, it is. When children come into large amounts of money or property, parents must sometimes establish what is known as a "guardianship of the estate". This is usually only necessary when children receive money or property in excess of around $5,000, but the amount varies depending on a state's laws.

A guardianship of the estate is important for two reasons: 1) it frees people and institutions from liability if they turn the money or property over to the child's parents and the parents subsequently misuse it; and 2) it subjects the parents' management of the property to a judge's scrutiny.

When a young child receives valuable property, though a will for example, they are often unprepared for the responsibility of managing the property. If a bank or the executor of the estate simply transfers the property to the child's parents instead of the child, the parents could misuse the property and the child could be left with nothing when they reach majority. This could expose the bank or executor to a lawsuit from the child or their guardian.

If the parents establish a guardianship of the estate, however, the guardianship laws remove liability from the bank or executor. The parents will also have to prove to a court that they have wisely managed the property, which offers the child additional protection.

While establishing a guardianship of the estate can protect a minor child's assets, it can also be expensive and time-consuming to create. Most states have recognized this and enacted laws that make it easier for parent to manage gifts made to their children if they are under a certain amount. A gift-giver usually only has to name someone to manage the gift until the child comes of age. This process doesn't require the intervention of any courts. The maximum amount of the gift varies from state to state, so be sure to check the laws where you live.

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