Minor Heirs and Property Sales and Settlement Agreements

In Texas, minor children are not able to enter into settlement agreements or to own property. Because of that rule, when someone passes away and leaves property to minor heirs that is not in trust, an issue arises of how to distribute the minor’s property. That issue can be trickier when that property must be sold or when the heirs enter into a settlement agreement.

 

In dependent administrations, the court must authorize the administrator of the estate to enter into settlement agreements and to make distributions of property. The administrator cannot dispose of estate property unless the court allows the distribution. When a minor heir is involved, the court sometimes appoints an attorney ad litem for the minor to ensure that the minor’s interests are being protected in the property settlement.

 

Under section 889 of the Texas Probate Code, the court can also authorize settlement of certain estates when the minor’s property interest totals less than $100,000. Section 889 allows the parent of the minor to apply to the court to allow the sale or settlement. The parent must affirm that the sales proceeds will be used for the benefit of the minor. If a court approves a settlement under this section, an attorney ad litem is not required, so the procedure often saves an estate time and expense. Additionally, the minor may not come forward later and attempt to have the sale voided because the minor’s interests were not protected. The proceeds must then be paid into the registry of the court.