Probate & Trust Law Section Conference Manual ... - Minnesota CLE

Minnesota courts, at least at an appellate level, have not directly addressed the effect of non‐resident
status on a guardianship determination. To see what they may likely do, let’s go back to the
guardianship statute.
524.5‐204 JUDICIAL APPOINTMENT OF GUARDIAN: CONDITIONS FOR APPOINTMENT.
(a) The court may appoint a guardian for a minor if the court finds the appointment is in the minor's best
interest, and:
(i) both parents are deceased; or
(ii) all parental rights have been terminated by court order.
If a guardian is appointed by a parent pursuant to section 524.5‐202 and the appointment has not been
prevented or terminated under section 524.5‐203, that appointee has priority for appointment.
The statute gives priority to one appointed by the parent and applies a standard well known to family law
attorneys, the best interest standard. In determining best interest, the court would likely look to the factors laid
out in Statute 518.17. Two factors in particular may disfavor guardianship by a non‐resident; factor (6), the
child's adjustment to home, school, and community and factor (7) the length of time the child has lived in a
stable, satisfactory environment and the desirability of maintaining continuity.
Practical issues may also interfere with the child moving out of country, the most obvious of which is
transferring a guardianship order made in Minnesota to the new home country and ensuring the child can
obtain legal status to reside in that country. The parents, in naming a non‐resident guardian, should also be
aware that in that choice, they are likely choosing a move to a foreign country for their child.
The decision to name a foreign guardian takes an evaluation of the particular situation of the family and
discussion of how to address practical issues. Generally, if the parents feel that the best choice to care for the
child is a non‐resident, even knowing the child will likely move to a foreign country, they should make that
desire known. There may be little chance that a court would name a non‐resident as guardian, unless they
acquire priority through appointment in the will.
Like many issues, there is an international treaty covering guardianship issues. The Convention of 1961
Concerning the Powers of Authorities and the Law Applicable in Respect of the Protection of Minors,
also known as the Hague Protection of Minors Convention also considers the interests of the child.
However, the United States is not a signatory.
10. Appointing a foreigner as trustee of a minor’s trust will not have tax consequences.
So wrong.
The IRS has very strict rules regarding foreign trusts. It is quite possibly the most significant trap for the
unwary.
From the IRS website, a foreign trust is any trust other than a domestic trust.
A domestic trust is any trust if: A court within the United States is able to exercise primary supervision over
the administration of the trust and one or more U.S. persons have the authority to control all substantial
decisions of the trust.
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