Minors and Conveyances
Mary Smith contacted me to assist her in the sale of a vacant lot owned by both Mary and her son, Michael. Mary originally went to a local title agency and was advised that she cannot complete the sale because her son is a minor – i.e., under the age of 18 years. Mary owns a 50% interest in the property, and her 17 year old son, Michael, owns the remaining 50% interest. They have a Buyer ready to purchase the lot for $25,000.00.
Initially, I explained that minors do not have certain contractual legal rights. Florida law provides that only individuals 18 years of age or older are deemed “sui juris,” which means that only those individuals 18 years of age or older have the full ability (i.e., are not under any legal disability) to execute contracts or to sign a deed conveying real property. Property can be transferred to and owned by a minor. The problem is that a conveyance executed by Michael, as a minor child, could subsequently be set aside by Michael after he turns 18. Existing case law would allow a minor to set the deed aside as long as seven years after the minor reaches his eighteenth birthday, unless that individual ratified the deed once he turned 18. Additionally, if he has already spent the money from the sale, there would be no obligation for the “minor” to pay the money back.
Florida law provides certain exceptions to this ability of a minor to subsequently set aside a conveyance. Specifically, the disability of nonage (lack of legal age) of a minor is removed if the minor is now, or ever has been married. Additionally, a circuit court has jurisdiction to remove the disabilities of nonage of a minor age 16 or older who resides in Florida based upon a petition filed by the minor’s natural or legal guardian. Alternatively, a guardianship proceeding could be filed with the circuit court, and an order authorizing the sale of the property by the guardian could be obtained, in order to transfer Michael’s interest in the property. Michael has never been married, and neither of these judicial proceedings has been undertaken to date. The cost of these proceedings might sometimes be justified, but fortunately there is a much simpler and less costly approach to remedy the absolute conveyance of Michael’s interest in this vacant lot.
Florida law provides that if the minor’s net interest in the property is less than $15,000.00, the natural guardian of the minor may execute a deed on behalf of the minor. The mother and father of the minor are the “natural guardians” of the minor. If both parents are still alive, both parents would have to sign the deed. If one of the parents dies, the surviving parent acts as the natural guardian. Mary’s husband and Michael’s dad, John Smith, is deceased. As a result, Mary has full power to execute a deed as the natural guardian for Michael – since Michael’s 50% interest in the property, $12,500.00, is less than the statutory maximum of $15,000.00. Although it will be necessary to document on the public record the fact that Mary and John are Michael’s parents, that John is now deceased, and that no guardianship or adoption proceedings have subsequently been filed, we will now be able to complete the sale of the property. The signature section on the deed for Michael’s one-half interest will read: “Michael Smith, by Mary Smith, his natural guardian.” The deed itself, for Michael’s one-half interest in the property, will be signed by Mary in her representative capacity, and not by Michael. The deed cannot be subsequently set aside by Michael.
Conveyances to minors, generally speaking, are potentially problematical when it is time to convey the property from the minor. Formal guardianships can be created on behalf of the minor, and property conveyed to the guardian on behalf of the minor. Guardianships are formal legal proceedings, and the guardian will only be able to sell the property after the court has entered an order authorizing the sale and conveyance of the minor’s interest in the property.
A minor’s interest in property can also be created under the Florida Uniform Transfers to Minors Act (“FUTMA”). Under FUTMA, property is conveyed to a natural (adult) person as a custodian of the minor child. The authority of the Custodian, unlike the “natural guardian” example above, is not subject to any monetary limitation. FUTMA, however, is extremely technical, and an attorney should always review the facts and determine the appropriate format of the deed. There may also be different time periods during which the Custodian may act on behalf of the “minor.” In certain situations, the authority of the Custodian ceases at the eighteenth birthday of the minor, and in other situations that authority will remain until the 21st birthday of the minor.
There are numerous variations to the examples that are set forth above. Any person wishing to vest title in a minor needs to be aware of the logistical problems that are created by transferring title to an individual who has not yet reached the age of 18, and should consult with his/her legal counsel to determine the appropriateness of such transfers.
This Article is not a substitute for hiring an independent attorney to determine the appropriateness of transferring property to a minor.
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.