The Children’s (Scotland) Act 1995 (“Act”) contains important rules about how children’s property must be managed when it is administered by someone on the child’s behalf. Section 10 sets out the obligations and rights of a person dealing with a child’s finances, inheritance, assets etc.
This section is particularly relevant to parents, guardians, trustees, or anyone who has been appointed to act as a child’s legal representative. Section 10 ensures that a child’s property is safeguarded and only used in ways that benefit the child.
Acting as a “Reasonable and Prudent Person”
Section 10 requires that anyone managing a child’s property must act as a reasonable and prudent person would act if managing their own affairs.
This means:
- Making careful financial decisions.
- Avoiding unnecessary risks.
- Ensuring the child’s assets are protected and not wasted.
For example, a guardian managing a child’s inheritance must not gamble with it or spend it recklessly, but should instead preserve it for the child’s future.
The Legal Representative’s Rights
The Act also recognises that the person managing a child’s property needs certain powers.
Unless restricted by a court order under section 11, the representative is entitled to do anything the child could do if they were an adult with full legal capacity.
This could include:
- Operating bank accounts.
- Making reasonable investments.
- Using funds for education or healthcare.
In short, the representative steps into the child’s shoes, but must exercise those rights responsibly.
Accountability to the Child
When the person stops acting as legal representative — for example, when the child turns 16 or when a guardian’s appointment ends — they must account to the child for how they handled the property.
This means being able to show records of:
- Money received.
- Money spent.
- Decisions made in relation to the property.
This accountability ensures transparency and protects the child from mismanagement.
The Exception: Using Funds for the Child’s Welfare
Section 10 also makes clear that the representative will not be liable if funds have been used properly to safeguard and promote the child’s health, development and welfare.
For example:
- Paying for school fees.
- Covering medical costs.
- Meeting reasonable living expenses.
As long as the spending is in line with the duty to promote the child’s wellbeing, the representative will not be held liable for using the child’s money in this way.
Why This Section Matters
Section 10 balances responsibility with flexibility:
- It imposes a duty of care on those managing children’s assets.
- It ensures the child can later hold the representative accountable.
- But it also allows money to be spent where genuinely necessary for the child’s wellbeing, without fear of future liability.
This strikes an important balance between protecting the child’s property for the future and ensuring their immediate needs are met.
Conclusion
Section 10 of the Children’s (Scotland) Act 1995 establishes clear standards for anyone administering a child’s property. They must act prudently, have wide rights to manage the property, and remain accountable – but they are protected from liability if they use the funds properly for the child’s welfare.
At XK Family Law Solicitors Aberdeen, we can advise parents, guardians, trustees, and executors about their duties in managing children’s property and can guide you through the process to ensure compliance with the law.
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Our articles are not legal advice. We accept no responsibility for use of this information.