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).
West Virginia case law also provides that an infant may purchase property and convey
title, subject to the general principle that he may ratify or disaffirm contracts
for such purchase or conveyance upon reaching the age of majority. See Zink v. Gray, 142 S.E. 428, 429 (W. Va. 1928) (holding that infant could contract for purchase
of automobile and disaffirm contract upon reaching age of majority); see also Muncey v. Norfolk & Western Ry. Co., 145 S.E. 581, 582 (W. Va. 1928) (holding that infant could own and convey deed for
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.
VI. West Virginia: A. Minors Although Neither Case Law Nor Statutes Establish How
Title is Held, We Believe the Better View, Based on C.J.S., is That Minors Hold Title
Section 2-3-1 of the West Virginia Code, "Legal Capacity", states that no person who
is eighteen years of age or older shall lack legal capacity, by reason of his age,
to enter into contracts, sell or purchase real or personal property, create a lien,
(or) execute any legal or other written instrument, prosecute or defend legal actions,
assert claims or deal in his own affairs in any manner whatsoever.
W. Va. Code Sec. 2-3-1 (1990). As in other states, this provision could imply that
persons under eighteen years of age cannot engage in the above transactions and cannot
have title to real or personal property.
However, as demonstrated above, the C.J.S. assertion that minors generally do hold
title to property may indicate another reading of section 2-3-1. That is, the statute
may simply state that parties at least eighteen years of age have full capacity to
contract, but that those under eighteen years of age have a limited capacity to contract.
This limited capacity allows the minor to disaffirm contracts and thus divest him
or herself of title. As was the case in Delaware, C.J.S. suggests that statutes granting
full powers to adults or otherwise competent parties do not bar incompetents or minors
from holding title ú B. Incompetents The Statutes Provide no Clear Answer as to Whether
Title Remains with the incompetent, but C.J.S. Supports the Argument that Incompetents
can Retain Title.
West Virginia addresses incompetents under statutes regarding incompetents and statutes
on mentally retarded/handicapped adults. The provisions for committees of incompetents
list the committees' powers. These powers comprise taking possession of the incompetent's
estate, suing or being sued in respect of the estate, and recovering debts due to
and from the incompetent. W. Va. Code Sec. 27-11-4 (1986). The court specifies the
powers of a guardian of a mentally retarded or handicapped person at the time of appointment.
W. Va. Code Sec. 44-10A-1 (1982). Thus, neither set of statutes indicates that incompetent
or retarded adults lose title to their property.
Arguably the absence of any provisions regarding title indicates that incompetent
or mentally retarded adults can hold title to property. The C.J.S. provision on "Insane
Persons," (see above) 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. This provision supports the argument that incompetents can
have title to property, although we can find no West Virginia case law stating this
proposition. The statutes and cases provide no clear answer. we therefore believe
the better view is to follow C.J.S. and conclude that incompetents can. hold title
to property in West Virginia.
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.
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."