How does a guardian manage assets (including any inheritance) received by their (minor) ward?
The guardian has a fiduciary duty to act in the best interests of the child. There’s no standard way (like how you have to pay your taxes) where the monies are to be managed, so long as the guardian acts in the best interests of the child.
In Singapore, there are no authorities which will periodically check up on all guardians/minors, nor are there are any authorities which all guardians/minors must periodically report to. Regardless, guardians will try to separate the minor’s assets (from his/her own personal assets). It is also good to keep records, in case of any disputes in the future.
It is not unlawful for a guardian to manage the minor’s funds through his personal account; however, it may be challenging to distinguish between his personal savings and the minor’s funds, particularly when considering tiered interest rates, as any income, including interest earned by the trust fund, belongs to the minor.
Once the child reaches age 21, the guardian’s role comes to an end. At this point, the guardian is required to transfer control of the minor’s assets to the young adult.
Any discrepancies have to be brought up to light since there are no default checks and/or reporting to begin with. If there’s a dispute, it’s usually best discussed with the parties involved first to see if an amicable solution can be reached. In the worst-case scenario, the parties may have to go to Court for litigation.
It is a common misconception that guardians can use the child’s assets (e.g. inheritance given to the minor) freely so long as it is used to take care of the minor, or to freely liquidate the minor’s property as needed.
Based on Singapore’s Guardianship of Infants Act, a guardian can use the income from a minor’s property to cover reasonable costs for their upkeep and education, but they must obtain court permission if these expenses exceed $100 per month. If the income is insufficient, or if additional funds are needed for the minor’s advancement, the court may permit the guardian to use the capital from the property, which could involve selling or mortgaging part of it for the minor’s benefit.
To put into perspective, you can use up to $100 of the income (e.g. interest/revenue generated) from the child’s property to cover reasonable expenses for their maintenance and education. However, if you need to use more than $100 per month from this income, you must apply to the court for permission.
If the income alone isn’t enough to meet the child’s needs or if you need to use the funds for their advancement (such as for major education expenses), you can apply to the court to access the capital itself.
For smaller estates, the court may decide not to appoint a formal guardian and may instead entrust the minor’s assets to a responsible person, who can manage the funds without needing regular court approval. This person has authority to use the assets for the minor’s benefit, although they may need to provide an account to the court. The court also has the power to replace this appointed person or appoint a formal guardian if circumstances require.
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