In the Matter of Miguel Grijalva

While the desire of a parent or guardian ad litem to maximize the return on investment (or to prevent an immature 18-year-old from squandering funds) is understandable, those considerations are subservient to the autonomy that the claimant/minor will have once the age of majority is reached.

When viewed as a whole, the statutory scheme for managing property belonging to a minor is to protect the property during minority, and to give it to the owner upon attainment of majority. That legislative intent is made clear in Sections 3612 and 3613, where the legislature limited the court's jurisdiction to make orders controlling the property of a person over the age of 18 who is not disabled.

Minor's Compromise petitions are both required and governed by Sec.3600, et seq., of the Probate Code. Section 3602 governs the disposition of what remains after the Court orders the payment of expenses, costs, and fees (Prob. Code Sec.3601.) As with all protective proceedings, the goal is the best interest of the person to be protected, but the protection of those best interests must be done within the structure provided by the Probate Code.

In the case of money or property paid or delivered pursuant to compromise or judgment for minor or disabled person, the code provides several options. Each of those options makes the minor's property available to the minor upon the age of majority.

Guardianship of the Estate: One alternative, of course, is the establishment of a guardianship of the estate of the minor. (Prob. Code Sec.1500, et seq.) Where there is a guardianship of the estate, the court may order the property into the guardianship estate, or may order it to be managed in another manner described in Sec.3602. Those other alternatives mirror Sec.3611's alternatives. A guardianship of the estate automatically terminates by operation of law "when the ward attains majority." (Prob. Code Sec.1600(a).)

Blocked Accounts: If no guardianship of the estate is established, Sec.3611 provides an exclusive list of available alternative options. Among those is an order to deposit the funds "in an insured account in a financial institution in this state...." (Prob. Code Sec.3611(b).) Those funds belong to the minor, and are to be paid to the minor without further court order when the minor reaches majority.

Single-Premium Deferred Annuities: Another alternative is for the court to authorize the purchase of "a single-premium deferred annuity." (Prob. Code Sec.3611(b).) A "Single-Premium Deferred Annuity," in this context, is defined by statute. Probate Code Sec.1446 provides: "'Single-premium deferred annuity' means an annuity offered by an admitted life insurer for the payment of a one-time lump-sum premium and for which the insurer neither assesses any initial charges or administrative fees against the premium paid nor exacts or assesses any penalty for withdrawal of any funds by the annuitant after a period of five years."

While Section 1446 does not specify that the annuitant has access to the funds at the age of 18, the practical effect is not significantly different. It is seldom financially advantageous to purchase an annuity if the payout is fewer than five years away, making annuities generally a less desirable alternative for a minor over the age of 13. The result would be that the minor has full access to those funds at age 18.

Furthermore, the annuity allowed under Section 3611(b) is far less restrictive than the typical structured settlement annuity (SSA). The SSA simply does not allow the annuitant access to the funds except as allowed by the structure imposed in the annuity contract. That's the situation that leads to television commercials showing people yelling "It's my money, and I want it NOW." The danger of a young adult selling a structured annuity for pennies on the dollar is substantial, because that young adult's parents or guardian ad litem decided years ago to restrict the annuitant's access to their own money.

Appearances: The court is open to the public for court business. The court is also conducting hearings via Zoom videoconference. Meeting ID: 161 956 1423 Passcode: 137305

Tentative Ruling: Conservatorship of Rodrigo Madrigal Ruvalcaba Tentative Ruling: Conservatorship of Rodrigo Madrigal Ruvalcaba