PR 07215.023 Maryland

A. PR 00-036 SSI and Property of Minors

DATE: May 10, 1999


In Region III (Philadelphia), a minor may hold title to property in the States of Pennsylvania, Delaware, Virginia, West Virginia, and the District of Columbia. A minor also may hold title to property in the State of Maryland, unless he/she has a guardian.


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).


Unlike in other jurisdictions within our region, a guardian of the property or estate in Maryland acquires title to the property of the minor' and may exercise general control over the property for the benefit of the minor. Courtney v. Lawson, 631 A.2d 102, 108 (Md. Ct. Spec. App. 1993). It appears, therefore, that if a guardian is appointed for a minor in Maryland, the guardian, and not the minor, will have title to the minor's property. Until a guardian is judicially appointed, however, a natural guardian has no right to control the estate or property of the minor. Courtney, 631 A.2d at 108.

Additional provisions in the Maryland Code support the proposition that a minor without a guardian may acquire and hold property. The Maryland Code provides that a minor holding title to property as a tenant by the entirety with a spouse who has reached the age of majority may convey property in the same manner as an adult. Md. Code Ann., Est. & Trusts § 13-503(a) (1998). The same statute provides that a minor veteran may mortgage property owned by him, execute a deed for the sale of real estate purchased, or perform other related acts in the same manner as an adult. Md. Code Ann., Est. & Trusts § 13-503(b) (1998). When read in the context of other Maryland Code provisions and prevailing case law, this statute provides that the general principle allowing a minor to ratify or disaffirm his conveyances upon reaching the age of majority do not apply under the special circumstances described. See State Laws Regarding the Titling of Property in the Name of a Minor or Incompetent at 2 (discussing a similar provision in the Delaware Code). This statute presumes that all minors may own property and affects only the ability of certain minors to contract for the conveyance of such property. Maryland case law similarly provides that a minor, under the age of twenty-one, may contract for the sale of real estate, but that such contract is voidable at the option of the minor. See Sprecher v. Sprecher, 110 A.2d 509, 512 (Md. 1955); see also McBriety v. Spear, 60 A.2d 528, 530 (Md. 1948).

In addition, the Maryland code contains a provision similar to the Delaware code provision regarding certificate of title for automobiles. The Maryland Motor Vehicle Administration will only issue a certificate of title to an individual under the age of eighteen if his application is co-signed by a parent, guardian, or other responsible adult. Md. Code Ann., Transp. § 13-104(b) (1998). Although the minor must demonstrate authorization by a responsible adult in order to obtain title, title is ultimately issued in his name. Therefore, this provision further demonstrates.that a minor may hold title to property in Maryland.

Finally, the Maryland Code contains special provisions, similar to those found in the District of Columbia Code, regarding the distribution of estate assets to a minor. When money is to be distributed by a personal representative to a minor who does not have a judicially appointed guardian, the personal representative may deposit such money into a bank account, to be delivered to the minor upon the attainment of age eighteen. Md. Code Ann., Est. & Trusts § 9-109(a) (1998). When tangible personal property is to be distributed to a minor, the personal representative may distribute it to the individual he considers responsible and appropriate, with the approval of the court. Md. Code Ann., Est. and Trusts § 9-109(c) (1998). Both provisions presume that a minor may be entitled to hold property, but that he may have limited ability to control such property.


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.


III. Maryland: Minors and Incompetents Who Have Guardians do not Hold Title to Property.

Maryland's Estates and Trusts statute on "Protection of Minors and Disabled Persons" describes the ownership of property under the guardian-minor and guardian-disabled person relationship. It states that "(t)he appointment and qualification of a guardian vests in him title to all property of the minor or protected person that is held at the time of appointment or acquired later." Md. Est. & Trusts Code Ann. Sec. 13-206 (c) (1) (1991) (emphasis added).

This provision covers both minors, who reach majority at age eighteen (Md. Est. & Trusts Code Ann. Sec. 13-101 (1)), and "disabled persons" (Md. Est. & Trusts Code Ann. Sec. 13-101 (d)), who would meet the standard for needing a representative payee under 20 C.F.R. Sec. 416.610 (1992). Thus, under Maryland's guardian laws, title vests in the guardian, and neither minors nor disabled persons can hold title to real or personal property. This conclusion is supported by the case of Law v. John Hanson Say. & Loan, Inc., 42 Md. App. 505, 400 A.2d 1154 (1979), which cites section 13-206, stating that the guardian of the elderly woman "was vested with title to (her) property and was the only person who validly could execute such a deed of trust." Id. at 1158.

The case of Alexander v. Rose, 181 Md. 447, 30 A.2d 785 (1943), however, states that the committee of a "non compos does not hold the legal title to the property of such non compos". Id. at 787. Under Maryland law, "committees" perform a far more specific function than do guardians. [FN2] Thus, the fact that committees do not take title does not conflict with section 13-206's provision that guardians do take title. Even if the Alexander proposition did present a conflict with section 13-206, that section would overrule the holding to the extent that it applied to guardians. Thus, notwithstanding Alexander, Maryland law places title in the guardian, not the infant or incompetent.

We have found no statute or case law specifically resolving the issue of the holding of title to property by a minor or incompetent in the absence of a guardian. Thus, we are unable to authoritatively answer your question. However, we believe the better legal view, based on the general C.J.S. propositions on this subject, is that title would vest in minors and incompetents.

It is worth mentioning that Maryland, in addition to its guardianship statutes, has adopted the Uniform Transfers to Minors Act (UTMA). Under this act, property is transferred to an adult other than the transferor, to be held as custodial property for the minor. The custodial property is "indefeasibly vested in the minor, but the custodian has all the rights, powers, duties and authority provided in this subtitle." Md. Est. & Trusts Code Ann. Sec. 13-311 (b) (1991).

Under the UTMA, the transferor creates custodial property by transferring the property to the custodian and registering or recording the property, when applicable, in the name of the custodian, "As custodian for (name of minor) under the Maryland Uniform Transfers to Minors Act." Sec. 13- 309 (5)

We include discussion of the UTMA here mainly for future reference. Should you eventually need to know how to indicate the minor's or incompetent's interest in property purchased as an SSI conservation measure, the UTMA may provide some answers, at least for minors. All the jurisdictions in the Region, except Pennsylvania and Delaware, have adopted this statute.


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 (1992).

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 value.

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.

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.

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