Distribution to a minor beneficiary: acceptance, representation and payment

The foundation board must comply with the foundation deed, manage the private foundation and represent it. Before payment, the file should therefore identify the deed provision supporting the distribution, the person established as beneficiary and the body authorised to adopt the specific resolution.

A separate civil-law question is who may represent the minor child when accepting the benefit. The authority of a parent or another authorised representative does not replace the foundation's distribution resolution. It also does not answer whether the transaction triggers special requirements for the child.

The file should keep both levels visible. The foundation resolution establishes the foundation-law basis for the payment. The representation documents show who may act for the child and to whom the payment may be made with discharging effect.

Section 167 ABGB governs the representation of a minor child in property matters. Within its applicable scope, a parent with custody may generally represent the child alone. Before payment, the foundation should therefore establish who currently has custody and authority to represent the child. A family description or an old power of attorney is not enough.

In practice, the foundation should document the child's identity, the identity of the person acting and that person's current authority. With joint custody, changed custody, another legal representative or a different court arrangement, the actual documents are decisive.

Payment into the child's account or into an account notified by the authorised representative does not remove the review. The payment route must correspond to the resolution, the representation and the documented arrangement. Deviations should be addressed before the transfer.

A straightforward cash distribution from a private foundation is not automatically the same as accepting a gift subject to burdens. The legal structure of the transaction is decisive. If the benefit includes duties, counter-performance, conditions or another restriction for the child, representation under section 167 ABGB requires a separate classification.

Section 167 ABGB identifies, among other sensitive property matters, accepting a gift with burdens and rejecting an offer of a gift. Stricter representation requirements and, depending on the case, court approval may apply. This consequence must not be transferred mechanically to every private-foundation payment.

A possible conflict of interest must also be made visible. If the representative is pursuing personal rights against the foundation or the payment is linked to that person's own obligation, the foundation should not treat a signature as conclusive. It must first be clarified who can effectively represent the child.

The file should contain the applicable foundation deed, the designation or determination of the beneficiary and the complete distribution resolution. It should also contain the child's identity data, evidence of custody or other representation authority and the bank details needed for payment.

If the transaction includes a condition, counter-performance or another burden, those terms must be available in full. If the legal classification requires an additional approval step, the evidence of approval belongs in the file before payment.

The documents should show that the amount and payment route correspond to the resolution. The foundation board can then later explain why the foundation paid, who represented the child and how the transaction was implemented.