Who Manages a Minor’s Inherited Property in the Philippines?

A comprehensive guide to guardianship and administration rules

1) Big picture: ownership vs. management

Ownership: A minor (below 18) can own property by inheritance, donation, or purchase. Title vests in the child.
Management: Because a minor lacks full capacity, someone else must administer the property until majority or earlier termination by law or court order.

2) Who manages by default? (Natural/legal guardianship)

Parents—the father and mother—jointly exercise parental authority and, with it, legal (natural) guardianship over their unemancipated child’s property.
If the parents are married and co-habiting, they act jointly; if there is disagreement, the father’s decision traditionally prevails, but the mother may seek court intervention.
If parents are separated, annulled, or one is absent, the parent with parental authority/custody generally acts, subject to court oversight.
For an illegitimate child, the mother exercises parental authority (and thus property administration), unless a court orders otherwise.

Duties of parent-administrators

Parents must:

Safeguard, preserve, and prudently manage the property solely for the child’s benefit.
Keep the child’s funds separate from their own; avoid self-dealing and conflicts of interest.
Account to the child (and the court when required).

Limits on what parents can do without a court

Parents cannot—without prior court authorization:

Sell, donate, exchange, mortgage, or otherwise encumber the minor’s real or personal property.
Enter into long-term leases beyond short, ordinary terms (leases longer than a year are commonly restricted without court leave).
Settle, compromise, or waive the child’s substantive property rights.

In practice, courts require a verified petition showing necessity or clear advantage to the child (e.g., to fund education, needed medical care, or to avoid loss), and will fix terms (price floors, appraisal, public auction, bond, deposit scheme).

When the estate is large

If the value of the minor’s property or its annual income exceeds a statutory threshold, the parents will be required to post a bond and/or secure letters of guardianship from the proper court before dealing with the property. (Courts still hew to the long-standing ₱50,000 trigger in the special rule on guardianship practice; some judges adjust in view of inflation—expect to justify any request and be ready for a bond.)

3) If parents can’t or shouldn’t manage

Court-appointed guardian of the property

A Regional Trial Court, sitting as a Family Court, may appoint a guardian of the minor’s property when:

Both parents are dead, absent, incapacitated, unfit, or have conflicting interests with the child;
The value or complexity of the estate requires formal guardianship despite living parents;
A donor/testator’s conditions require it; or
It is otherwise necessary for the child’s best interests.

Preference order (flexible; the court always prioritizes the child’s welfare): surviving parent → grandparent → eldest adult sibling → actual custodian → nearest kin → another suitable person or institution (including a professional guardian or trust company).

Guardianship essentials

Verified petition (facts of minority, assets, need for guardianship, proposed guardian, and reliefs).
Venue: where the minor resides; if non-resident, where the property is located.
Bond: amount fixed by the court (to answer for losses due to malfeasance or negligence).
Letters of Guardianship: issued after hearing; these are the guardian’s authority.
Inventory & plan: initial inventory (typically within 60–90 days) and a management/investment plan.
Annual accounts: periodic reports of income, expenses, and asset condition; receipts required.

Transactions needing court leave A judicial guardian must seek leave of court to:

Sell/encumber real or personal property;
Invest or reinvest funds (courts prefer risk-free instruments like government securities or insured deposits);
Compromise claims or enter long leases;
Spend principal (as opposed to income) for support, education, or emergencies.

Removal & substitution Grounds include breach of trust, waste, conflict of interest, incapacity, failure to account, or moving away without court permission. The court can appoint a successor guardian.

Guardian ad litem (for lawsuits only)

If the minor is a party to a suit, the court appoints a guardian ad litem to represent the child within that case only. This is not a property administrator (unless separately appointed as such).

4) What if a will or donation appoints someone else?

A parent may designate a guardian in a will; courts usually honor this testamentary guardian unless unfit.
A testator/donor may create a trust (with a trustee) for assets given to a minor. In that case, the trustee, not the parents, manages the trust property per the trust terms, subject to judicial relief for abuse or deviation.
If the will creates only a temporary executorship (during estate settlement), the executor/administrator holds and protects the property; distribution to the minor is made to the parent/guardian or trustee as the decree provides.

5) How estate settlement intersects with guardianship

Probate/intestate proceedings control who inherits and in what shares.
While the estate is under court administration, heirs do not yet receive the specific assets; the executor/administrator preserves them.
On project of partition and decree of distribution, the share for the minor is delivered to the guardian (or trustee) per court order.
If the minor and his administrator/guardian have conflicting interests in the estate (e.g., the parent is also an heir), the probate court may appoint a special guardian or require separate counsel.

6) The parents’ “legal usufruct”

Parents customarily enjoy a legal usufruct over a child’s property (i.e., the income of the property may be used for the child’s support and education, and the family’s essential needs in line with parental authority). Exclusions typically include:

Property given by gratuitous title (donation or inheritance) with an express exclusion of parental usufruct;
Property acquired by the child’s work or industry; and
Property subject to conditions inconsistent with parental usufruct. Even where usufruct applies, capital must be preserved, and court approval is needed to touch principal beyond ordinary administration.

7) Safeguards the court will look for

Expect courts to require or impose:

Independent appraisal before a sale;
Public auction or minimum price;
Net-proceeds deposit in the child’s name in an insured, restricted account (withdrawals by court order only);
Periodic reporting (bank certifications, school receipts, medical bills, tax declarations);
Prohibition on self-dealing (e.g., parent buying the child’s property, or using it as collateral for the parent’s debts).

8) Venue, procedure, and documents checklist

Where to file: RTC Family Court of the minor’s residence (or where the property is, if non-resident).
What to file: Verified petition; birth certificate; death/absence evidence of parents (if applicable); inventory & valuations; proof of necessity/benefit (e.g., tuition statements); proposed bond; and draft orders.
Who must be notified: The minor (through custodian), known relatives, and sometimes the local social worker; publication or posting may be ordered for property dispositions.
Hearing: Summary but adversarial—court examines necessity, suitability of guardian, and terms of administration.
After appointment: Post the bond, receive letters, file inventory, open restricted accounts, and calendar annual accountings.

9) Special situations

Conflicts of interest: If the parent’s personal interest conflicts with the child’s (e.g., both claim the same parcel), the court appoints an independent guardian or guardian ad litem for the specific matter.
Minor abroad / property in the Philippines: Philippine courts may take guardianship jurisdiction over the local property; foreign guardians may need to domesticate their appointment before dealing with Philippine assets.
Multiple children: Each child owns separate undivided shares; administration should respect individual accounts even if a single guardian acts for all.
Real property taxes & maintenance: Guardian ensures taxes, insurance, and upkeep are paid; failure can be maladministration.
Emergency expenditures: Courts can authorize interim withdrawals on urgent motion (medical, safety) pending full hearing.

10) When does guardianship end?

Majority (18th birthday) or earlier emancipation by law;
Adoption (parental authority shifts to the adopter, but existing guardianship orders may need formal termination);
Death of the minor; or
Court order (e.g., assets depleted, trust replaces guardianship, or guardian removed). A final accounting and discharge of the guardian—and turn-over of all assets and documents to the now-adult child—are required.

11) Practical tips for families and practitioners

Document everything: Keep receipts, bank statements, and a running ledger per child.
Segregate funds: Use passbook/time-deposit or treasury placements titled in the minor’s name with withdrawal “by guardian, as such, per court order.”
Don’t wait on court approval**:** File before selling, mortgaging, or entering a long lease—post-facto ratification is risky and often denied.
Consider a trust: For sizable inheritances, a simple trust with clear investment and distribution rules (education, health, support) can reduce repeat court visits.
Disclose conflicts early: If the parent is also an heir or buyer, ask for a special guardian and full court supervision.
Mind tax and estate compliance: Ensure estate taxes are settled in the decedent’s estate before transfer; thereafter file any capital gains, documentary stamp, or local taxes that a transaction may trigger.

Quick reference (at a glance)

Default manager: Parents (as natural/legal guardians).
Court approval needed: Any sale, mortgage, encumbrance, compromise, long lease, or major use of principal.
Large estates: Court may require bond and letters of guardianship (expect scrutiny and reporting).
If parents unfit/absent/conflicted: Court appoints an independent guardian (or trustee under a will/trust).
End of guardianship: At 18, or by court order (with final accounting and turn-over).

This article synthesizes the prevailing framework under the Family Code, the Rules of Court (special proceedings), and the Supreme Court’s rule on guardianship practice in Family Courts, as applied in Philippine jurisdictions. For a specific case, tailor filings to the local Family Court’s preferences and any standing administrative circulars.