Are Inheritances for Minors Controlled by Custodial Parents in New Zealand?

When a minor child in New Zealand receives an inheritance, it’s natural for parents to have questions about who controls and manages those assets. The topic of inheritances for minors and the role of custodial parents is an important one to understand. In this article, we’ll explore the legal framework surrounding this issue and provide clarity on how these situations are typically handled under New Zealand law.

The Care of Children Act 2004 and Inheritances for Minors

The primary legislation governing the care and welfare of children in New Zealand is the Care of Children Act 2004. This Act outlines the responsibilities and rights of parents, guardians, and the court in relation to children. However, it does not specifically address the topic of inheritances for minors and the control of those assets by custodial parents.

Section 16 of the Care of Children Act 2004 states:

The duties, powers, rights, and responsibilities of a guardian of a child include (without limitation) the guardian’s—

(a) having the role of providing day-to-day care for the child (however, under section 26(5), no testamentary guardian of a child has that role just because of an appointment under section 26); and

(b) contributing to the child’s intellectual, emotional, physical, social, cultural, and other personal development; and

(c) determining for or with the child, or helping the child to determine, questions about important matters affecting the child.

While this section outlines the general duties of a guardian, it does not explicitly grant custodial parents control over a child’s inheritance.

The Role of Trustees in Managing Inheritances for Minors

In most cases, when a minor child inherits assets, the will or trust document appointing the inheritance will also name a trustee to manage those assets on behalf of the child until they reach a specified age, often 18 or 25. The trustee has a fiduciary duty to manage the inheritance prudently and in the best interests of the child beneficiary.

Trustees can be family members, friends, or professional trustees such as lawyers or trust companies. The trustee is responsible for overseeing the inheritance, making investment decisions, and distributing funds for the child’s benefit according to the terms of the will or trust.

It’s important to note that the trustee’s role is separate from that of the child’s parents or guardians. While parents may be named as trustees, their control over the inheritance is subject to the legal duties and limitations of a trustee, not their parental rights.

When Inheritances for Minors May Fall Under Parental Control

There are some limited circumstances where an inheritance for a minor child may fall under the control of their custodial parent:

• If the inheritance is relatively small and no trustee is appointed, the court may allow the child’s guardian to manage the funds on the child’s behalf.
• If the child’s parent is appointed as the trustee, they will have control over the inheritance, but must manage it according to the terms of the trust and relevant trust law.
• If the inheritance is left to the child with no trust provisions and the child is close to the age of majority, the court may decide to release the funds to the child or their guardian.

However, in most significant inheritance cases, the assets will be placed in a trust managed by an appointed trustee until the child reaches the specified age of inheritance.

Obtaining Legal Advice on Inheritances for Minors

Navigating the legal complexities of inheritances for minor children can be challenging. If you find yourself in a situation where a child has inherited assets, it’s crucial to seek advice from an experienced estate lawyer who can guide you through the process and ensure the inheritance is managed correctly.

Naomi Cramer, a leading New Zealand family lawyer, has extensive experience assisting families with inheritance and estate matters. Her family law practice is dedicated to providing compassionate, knowledgeable legal support to clients facing these complex issues.

Conclusion: Inheritances for Minors and Parental Control

In conclusion, inheritances for minors in New Zealand are typically controlled by appointed trustees rather than automatically falling under the control of custodial parents. The Care of Children Act 2004, while outlining parental duties, does not grant parents direct control over a child’s inheritance.

If you are dealing with an inheritance involving a minor child, it’s essential to consult with a skilled estate lawyer like Naomi Cramer. Her expertise in family law and estate matters can provide invaluable guidance and ensure the inheritance is managed in the child’s best interests. Don’t hesitate to seek legal advice to protect your child’s financial future.

No solicitor-client relationship is created by this article. The author and owner shall not be liable for your reliance on the information contained in this article. Readers should obtain their own independent legal advice.