This is in response to your request for an opinion regarding whether minors may own
property in the five states and one district in our region and, if so, regarding any
specific requirements on how the property must be titled. This issue has previously
been addressed by our region in a November 1992 memorandum. See Memorandum from Elinor Stoddard, Assistant Regional Counsel, Office of the General
Counsel, Region III, to Larry Massanari, Regional Commissioner, Social Security Administration,
State Laws Regarding the Titling of Property in the Name of a Minor or Incompetent.
In response to your request, we rely mainly on our prior memorandum. This prior memorandum
did not address the issue of any titling requirements within our jurisdictions, but
we have found no authority specifically regarding either "restrictions as to the age
of the minor or the types of property that can be held" or "how the property should/must
be titled to show the minor as the titleholder" in any of our jurisdictions.
This memorandum should serve as an addendum to our November 1992 memorandum, as it
provides further support for our position that a minor may hold title to property
in Pennsylvania, Delaware, the District of Columbia, Virginia, and West Virginia and
may hold title to property in Maryland, unless he has a guardian. Since we have determined
that a minor may hold title to property in all of our jurisdictions, there is no need
to address the fourth question concerning the preferred method of titling property
if a minor cannot hold title to property.
Uniform Transfers to Minors Act
Each of the states and the district in our region has a Uniform Transfers to Minors
Act (UTMA), which provides a mechanism for transferring property to a minor by will,
trust, gift, or payment of debt. 20 Pa. Cons. Star. Ann. §§ 5301(b), 5304-5306 (West
1998); Del. Code Ann. tit. 12, §§ 4504-4506 (1997); D.C. Code Ann. §§ 20-305 to -307
(1998); Va. Code Ann. §§ 31-40 to -42 (Michie 1998); W. Va. Code §§ 36-7-4 to -6 (1998);
Md. Code Ann., Est. & Trusts §§ 13-304 to -306 (1998). Although the UTMA does not
directly address the issue of whether a minor may acquire property with retroactive
benefit checks, it provides further support for the common law proposition that miners
may hold title to property. When property is transferred in accordance with the UTMA,
the custodial property is indefeasibly vested in the minor, but the custodian retains
the authority to take control of, register and record title to, collect, hold, manage,
invest, and reinvest the property. Pa. Cons. Star. Ann. §§ 5311(b), 5312(a) (West
1998); Del. Code Ann. tit. 12, §§ 4511(b), 4512(a) (1998); D.C. Code Ann. §§ 21-311(b),
-312 (1998); Va. Code Ann. §§ 31-47 to -48 (Michie 1998); W. Va. Code §§ 36-7-11(b),
-13 (1998); Md. Code Ann., Est. & Trusts §§ 13-311(b), -312 (1998). Under the UTMA
in each of our jurisdictions, a minor may hold title to property that is received
by gift, will, trust, or payment of debt, and none of our jurisdictions have authority
indicating that miners have lesser rights with respect to property acquired through
purchase or other conveyance. The UTMA in the District of Columbia and Virginia defines
"minor" as an individual under the age of eighteen, while the UTMA in the remaining
jurisdictions, Pennsylvania, Delaware, West Virginia, and Maryland, defines "minor"
as an individual under the age of twenty-one. D.C. Code Ann. § 20-301 (1998); Va.
Code Ann. § 31-37 (Michie 1998); Pa. Cons. Star. Ann. § 5301(b) (West 1998); Del.
Code Ann. tit. 12, § 4501(11) (1998); W. Va. Code § 36-7-1 (1998); Md. Code Ann.,
Est. & Trusts § 13-301(k) (1998).
An additional provision of the Delaware Code addressing certificates of title for
automobiles presumes that minors may hold title to property. In order to apply for
a certificate of title to an automobile, an individual under the age of eighteen must
obtain written consent from at least one parent or guardian. Del. Code Ann. tit. 21,
§ 2302(c) (1997). The Department of Motor Vehicles will only issue a certificate of
title to an individual under the age of eighteen with the signature of a parent or
guardian consenting to the grant of title. Del. Code Ann. tit. 21, § 2306(d) (1997).
Although a minor must obtain consent from a parent or guardian to obtain title, the
title is ultimately granted to the minor, not the parent or guardian. Therefore, a
minor may hold title to property, including an automobile, in Delaware.
For the above reasons, in addition to the reasons outlined in our November 1992 memorandum,
we believe that a minor may own and acquire property in Pennsylvania, Delaware, Maryland,
Virginia, West Virginia, and the District of Columbia.
DATE: November 25, 1992 TITLE: State Laws Regarding the Titling of Property in the
Name of a Minor or Incompetent AUTHOR: Hardnett, Charlotte; Newman, James C.; Stoddard,
Elinor AUTHOR—POSITION: Acting Chief Counsel; Division Chief, Program Review; Assistant
AUTHOR—POSITION: Regional Counsel RGNDIV: R3 ADDRESSEE AND POSITION: Massanari, Larry
G.; Regional Commissioner ADDRESSEE—LOCATION (Region/Div): SSA
This is in response to your memorandum in which you ask whether property in Region
III states can be titled in the name of a minor or an incompetent. You asked this
question in the context of evidencing a Supplemental Security Income (SSI) beneficiary's
ownership in property that representative payees purchase as a conservation or investment
of SSI benefits.
In brief, our survey reveals that only Pennsylvania clearly allows minors and incompetents
to hold title to real and personal property. We believe that District of Columbia
law places title in minors and, unless they have conservators, incompetents as well.
Delaware law strongly indicates that both minors and incompetents can have title to
property. Among the remaining states, minors may have title in Virginia and West Virginia,
and lose title in Maryland if they are under guardianship. In those same states, incompetents
retain title in Virginia, may retain title in West Virginia, and lose title in Maryland
if they are under guardianship.
According to Corpus Juris Secundum (C.J.S.), minors generally can have title to real
and personal property, and "insane" persons retain title to their real and personal
property. In researching the states in Region III, however, other than in Pennsylvania,
we can find no specific authority answering the question of whether title can rest
with a m/nor or incompetent. In these states one must rely on statutes and cases governing
the relation between guardian and minor or incompetent, or on statutes in other areas
of the law. Where the law is unclear, C.J.S. assertions may indicate that these states
would allow minors and/or incompetents to hold title to real and personal property.
C.J.S., however, merely describes its general findings among the states. It in no
way controls the law of any state.
II. Delaware: Statutes and Case Law Read in Light of C.J.S. Indicate That Both Minors
and Incompetents can Hold Title to Real and Personal Property.
Delaware's relevant statute on Titles and Conveyances explains that persons at least
eighteen years of age and not otherwise incompetent can take title to a deed. The
statute thus implies that title cannot vest in minors and incompetents: Acquisition
and conveyance of title to real estate by persons of the age of 18 years or older.
Any person of the age of 18 years or older who is not otherwise incompetent may contract
to purchase, acquire, take, hold, sell, transfer, assign . . . or otherwise convey
any estate, right, title or interest in real estate, may take title to and accept
delivery of a deed . . . or other instrument of conveyance . . . and may execute,
acknowledge and deliver a deed . . . or other instrument . . . without the interference
of a guardian, trustee, or the like, and such . . . instrument . . . shall be valid
and legally effective . . . and shall bind him . . . .
Del. Code Ann., tit. 25, Sec. 312 (1974) (emphasis added).
However, one of Delaware's "Guardian and Ward" statutes speaks of a minor's having
title in real estate. Section 3954 states that, upon sale of the minor's real estate,
the court "shall direct the guardian or trustee to make a deed to the purchaser, who
shall take, under such deed, all the title to the real estate which the minor had
therein." Del. Code Ann., tit. 12, Sec. 3954 (1987) (emphasis added). This provision
and a virtually identical provision (Del. Code Ann., tit. 12, Sec. 3706(a)) for mentally
ill persons (incompetents) refer to the minor's and incompetent's having title in
The statutes regarding guardians and the mentally ill, therefore, appear to contradict
section 312, the general title statute. One way to resolve the conflict is to read
section 312 not as barring minors and incompetents from holding title, but merely
as specifying that if the party is at least eighteen years of age and competent [FN1],
the party can hold title, and enter into binding contracts with respect to their property,
regardless of any action by a guardian. This reading would acknowledge that minors
and incompetents can disaffirm or "avoid" the contracts into which they enter. That
is, minors and incompetents can purchase and hold title to property, but if they avoid
their contracts to purchase the property, they are not bound by the terms of those
contracts and thereby lose title to that property. Section 312 may merely acknowledge
that parties over eighteen years of age and competent are bound to their contracts,
while minors and incompetents are not.
This reading of section 312 comports with C.J.S.'s provision on acquisition of property
by infants, 43 C.J.S. Infants Sec. 126 - 46 (1978), and its provision on the rights
of guardians and committees over "insane" persons, 44 C.J.S. Insane Persons Secs.
1-155 (1945). Moreover, the holding of Equitable Trust Co. v. Union Nat. Bank, 18 A. 2d 22'8 (1941), (described below) that incompetents retain title to their
property requires us to read section 312 as allowing at least incompetents to hold
First, C.J.S. states that an infant generally "has the capacity to acquire and own
property" and to "receive title to property." 43 C.J.S. Infants Sec. 126 46. Section
137 also states.that "until a contract of purchase is avoided by the infant's disaffirmance
thereof, an infant purchaser has the capacity to pass good title to the property."
43 C.J.S. Infants Sec. 137. C.J.S. thus states that infants do hold title to property
for which they contract, and continue to hold that title unless they disaffirm the
C.J.S. cites no Delaware cases for the proposition that minors can hold title to property.
However, by interpreting section 312 according to the proposition that minors can
hold title, section 312 comports with section 3954, which indicates that minors can
hold title to real property. Thus, it appears to us that the better view is that minors
can hold title to property under Delaware law.
For incompetents, C.J.S. states that "the guardian or committee has no title to the
property of his ward, whether in trust or otherwise, but the title remains in the
ward." 44 C.J.S. Insane Persons Sec. 85. The text then cites Equitable Trust Co. v. Union Nat. Bank, 18 A.2d 228 (1941), a case from the Court of Chancery of Delaware. The court therein
stated that at common law "the trustee did not have title to the property of the incompetent
person . . and does not have title under our statute." Id. at 230. Although this is an old case, the statutes the court cited are virtually
identical to the current statutes on the trustee-incompetent relation. Delaware law
thus provides that the incompetent retains title to property, even if the incompetent
has a trustee. This case further demonstrates that section 312 cannot be read to bar
minors and incompetents from holding title to property.
Viewing Region III as a whole, we believe the uncertain results of our survey demonstrate
the difficulty with SSI's approach to handling representative payee purchases of real
and personal property with SSI funds. Another, perhaps more logical, approach to the
problem of tying the purchases in question to the minors or incompetents would be
to treat the purchase of the assets or improvements/additions thereto as "use" of
the benefits, rather than conservation of the benefits. We believe this approach is
consistent with the regulations and avoids what could be an awkward, if not exceedingly
complicated, means of ensuring that the beneficiary actually collect upon the eventual
sale of the "investment" asset.
The SSI regulations on "Use of benefit payments" for SSI recipients states that "(w)
e will consider that payments we certify to a representative (sic) payee to have been
used for the use and benefit of the beneficiary if they are used for the beneficiary's
current maintenance. Current maintenance includes costs incurred in obtaining food,
shelter, clothing, medical care and personal comfort items." 20 C.F.R. Sec. 416.640
The regulations regarding "Conservation and investment of benefit payments" state:
If payments are not needed for the beneficiary's current maintenance or reasonably
foreseeable needs, they shall be conserved or invested on behalf of the beneficiary.
Conserved funds should be invested in accordance with the rules followed by trustees
. . . . . . Preferred investments for excess funds are U.S. Savings Bonds and deposits
in an interest or dividend paying account in a bank, trust company, credit union,
or savings and loan association . . . . 20 C.F.R. Sec. 416.645 (1992).
The types of assets most frequently in question here are houses, additions and/or
improvements to existing real estate, automobiles, mobile homes, trucks, vans, and/or
special equipment added to motor vehicles. While the purchase of a home is to some
extent an investment, the additions/improvements to homes or motor vehicles that representative
payees make to benefit the beneficiary may not add market value to the underlying
asset. Furthermore, the purchase of vehicles such as automobiles, vans, and trucks,
or even mobile homes, whose value decreases rapidly in time, does not seem to fit
the type of conservation or investment of funds envisioned in the regulations at Sec.
416.645, which list deposits in savings account or the purchase of U.S. Savings Bonds
as acceptable or preferred investments. In fact, the purchase of depreciating assets
like automobiles hardly qualifies as an "investment" in any context.
We believe that in most instances the purchases of homes, vehicles, or additions/improvements
thereto will qualify under the "Use of Benefits" provision of Sec. 416.640. These
purchases appear to directly serve the needs of beneficiaries and meet the definition
of "current maintenance" as shelter, personal comfort items, or reasonably foreseeable
needs. Therefore, deeming the purchases as use, rather than conservation, of benefits
is both a more accurate description of the transactions and a way to avoid the necessity
of developing ownership or titling of property as the means to ensure that the beneficiary's
benefit upon the sale of the asset. The true benefit to the beneficiary of an automobile
or even a house is the daily use or availability of the asset, and not its resale
Finally, we ask that if a beneficiary or his representative has information contrary
to what we have concluded in this memorandum concerning title, please forward it to
us and we will consider it. Also, if you have any questions about this memorandum,
please call the undersigned at 596-1246.
FN1 Delaware law provides that persons eighteen years of age or older, who are not
incompetent, have full capacity to contract. Any person who has reached eighteen years
of age "shall become fully responsible for his contracts." Del. Code Ann., tit. 6,
Sec. 2705. Minors and incompetents can disaffirm their contracts.
FN2 "'Committee' includes any reorganization or protective committee formed for the
purpose of formulating, proposing, or carrying out any plan of reorganization or to
act in any other manner for the protection of the interests of the holders of any
class or classes of securities, or persons performing a similar function, and any
corporation formed or acting for any such purpose."