July 6th, 2020
Transfers to Minors
Under the old English common law, a minor lacked legal capacity. Therefore, a minor could not enter into a contract or own any property. When West Virginia gained statehood in June, 1863, this same principle became an established part of West Virginia law.
Yet in 1986 the Legislature adopted the Uniform Transfers to Minors Act, which provided a way for minors to keep and hold property in certain situations. The transfer (usually cash or cash equivalents) is made to a “custodian” responsible for holding legal title to the property until the minor reaches adulthood.
The convenience of transfers made this way is the cost and legal complexities associated with establishing a trust can be avoided. Instead, the transfer is made directly to the custodian for the minor’s benefit. The custodian is a fiduciary -- i.e. one who is responsible for caring for the property fully, fairly, and in good faith -- for making an accounting of the property, and for delivering the property and all accrued interest when the minor turns 18.
What happens if the custodian dies or is otherwise unable or unwilling to serve? W.Va. Code 36-7-18 gives circuit courts jurisdiction over these issues.
Naturally, if the document making the gift designates a successor, then the successor language will be controlling. If, however, the document is silent, the circuit court must appoint a successor.
If the minor is 14 years old, then the minor has limited power to appoint a successor. Otherwise, the court may appoint the minor’s conservator or other legal representative, an adult member of the minor’s family or some other interested party. The successor is, of course, subject to the same fiduciary duties as the original custodian.