We recently had a closing that was put on hold when we found that one of the owners of the property was a minor. The parents had good intentions; they wanted to be sure their child would have property if something happened to them. They asked an attorney to add the child to the deed. And, unfortunately, the attorney did so. Although the attorney did what they asked, the attorney did not address the downstream consequences. In Georgia, that action created an expensive and time-consuming problem.
In Georgia, a Minor Cannot Sell Real Estate
Let’s start with the basics. Under Georgia law, a minor does not have legal capacity to convey real property. In fact, a security deed or deed that, on its face, conveys property by a minor is voidable; at age 18 the minor could void that conveyance. See OCGA 44-5-41.
A Conservatorship Is Required if a Minor Owns the Property
When a minor owns real estate in Georgia, neither the minor nor their parents can simply sign the documents to convey the minor’s interest in the property. Rather, the probate court must appoint a conservator to manage that property on the child’s behalf. And then the conservator must seek leave to sell the property. The standard probate form 14 for Petition of Conservator for Leave to Sell Property to Rent, Lease or Otherwise Dispose of Property shows all that is required for the court to approve that sale.
A Conservatorship Will Delay the Closing
Going through that conservatorship process will take time and money. This makes sense from the perspective of protecting the minor’s interest, but it will certainly delay a closing. The closing can’t occur until the probate court issues an order allowing the conveyance. That means that contract deadlines will need to be extended and the buyer may even terminate the agreement. A routine sale can easily turn into a months‑long process. In our recent closing-that-wasn’t, the real estate agent was not willing to wait out this process and terminated the contract.
Sale Proceeds May Be Restricted for the Child’s Benefit
Additionally, a conservator is a fiduciary and must manage the minor’s property solely for the minor’s benefit. This includes preserving the child’s share of sale proceeds under court supervision. This could catch the parents by surprise, especially if they were counting on those funds to help purchase another home.
Better Alternatives That Don’t Create Closing Problems
If the goal is to make things easier for your family, there are better ways to do it without putting future transactions at risk. While it’s easy to add a minor to a deed, it makes selling that real estate much more difficult. We urge any families considering this option to talk with an estate planning firm that can help with a will or trust to preserve a child’s interest in property.
One of core values at Sherman & Phalen is to say “yes” whenever possible. But this was one of those times that it was not possible. We hope others can avoid that problem.
