(a) Except as provided in subsections (b)-(d), no person shall undertake the administration of the estate of a minor or person with a disability until the person has been issued letters of guardianship or letters of conservatorship; provided, that no guardian or conservator shall be appointed if the property of the minor or person with a disability is deposited with the clerk of the court subject to distribution on order of the court. The letters of conservatorship shall either:

(1) Recite the specific powers to be exercised by the conservator and the specific powers retained by the person with a disability; or

(2) Have attached to them the order or orders of the court specifying the powers to be exercised by the conservator and the powers retained by the person with a disability.

(b) If the total property of a minor or person with a disability does not exceed the sum of twenty-five thousand dollars ($25,000) and the court determines it is in the best interest of the minor or person with a disability, the court may order any person holding property belonging to the minor or person with a disability to deliver all or any part of the money or property, without the necessity of the appointment of a fiduciary, to the natural guardian or guardians of the minor or to the person with whom the minor or person with a disability resides or to the person with a disability. Notwithstanding any law to the contrary, if the guardians of the minor are the parents of the minor and are divorced or legally separated from each other, the court may order that the funds be delivered, all or in part, to either of the parents if the court finds that such order would best serve the welfare of the minor. The receipt by any of these persons of the money or property discharges the paying entity from further liability. To bring the matter before the court, any person may petition the court for an order of distribution. The petition shall set forth the information required by § 34-2-104 and § 34-3-104, except the petition shall request distribution according to this section instead of the appointment of a fiduciary. The court may appoint a guardian ad litem to assist it in determining the best interest of the minor or person with a disability.

(c) In any judicial proceeding in which any fund or part of the fund is decreed to belong to a minor or person with a disability, or in which there is a recovery in favor of a minor or person with a disability, the court trying the case may retain the fund or recovery or part of the fund or recovery to be disbursed by the clerk and master or clerk of the court for the support, maintenance or education of the minor or person with a disability under the orders of the court; provided, that the fund or part of the fund or the amount of the recovery does not exceed the sum of twenty-five thousand dollars ($25,000) and the minor is without a legal guardian; and provided further, that the court, in its discretion, may direct the fund to be paid to the natural guardian of the minor or the other person having the care and custody of the minor or person with a disability to be applied for the support, maintenance or education of the minor or person with a disability, subject to such terms and conditions as the court may impose.

(d) In a proceeding to determine letters of guardianship or conservatorship, the court shall be vested with the authority to direct any fund or part of the fund decreed to belong to a minor or person with a disability, or in which there is recovery in favor of a minor or person with a disability, into a trust created under the Tennessee Uniform Trust Code, compiled in title 35, chapter 15 with such fiduciary appointed upon order of the court according to this chapter.