There comes a time when minors, senior citizens, or disabled persons might need someone to manage their money. In these cases, a guardian will be appointed by the court to control guardianship of the persons accounts. While you want to think that every one who is appointed a guardian of an account is trustworthy and will manage the accounts ethically and wisely, that is not always the case. That is why there are rules governing the control of guardian accounts. From who has access to the account, to who owns it, and how money is spent, courts monitor these accounts.

Children and Guardianship Accounts

Children are not legally allowed to open a bank account or manage their own money in an account. Sometimes a parent or guardian might jointly open an account for a child to save money for college or to just help to teach the child about saving. In this case the parent is the actual owner of the account and has control over the money, and may do what they wish with the funds.

This is different then a guardianship account. With a guardianship account the money does belong to the child. The guardian of the account manages the money for a child but doesn’t not have any ownership over that money. The most common reason for a child to have an account with guardianship is that the parents are deceased and have left money or property for the child and someone, the guardian, needs to control that account until the child is of legal age.

Elderly or Disabled Individuals and Guardianship Accounts

Sometimes adults do not have the physical or mental capacity to manage their finances and a guardian needs to be appointed. As with children, the guardian does not gain any ownership of the persons finances, they just manage the account. The court chooses an appropriate guardian for someone who has been deemed unable to manage their finances.

The Rules and How it all Works

As mentioned, the guardian of an account controls the funds and must report all receipts and disbursements to the court on a periodic basis. The guardian handles the account but had no ownership of the account, meaning the money or property in the account.

  • All guardianship accounts have a beneficiary or a “ward”, usually a child, elderly, or disabled individual.
  • The guardian of the account can not appoint a beneficiary of the account. It other words can not change who the account is for and who receives the disbursements.
  • In order to open an guardianship account, the guardian must show a certified copy of a court order appointing them guardian of an individuals account.
  • If an individual can no longer serve as guardian of an account, because of death or some other reason, the court will appoint a new guardian for the account.
  • Because the guardian does not own the funds in the account, the money can not be used to settle the debt of the guardian – meaning it can’t be garnished or siezed.

Creative Commons License photo credit: The Labour Party


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Comments | 4 Responses

  1. Susannah Junkins says

    Hello.. We are from Indiana. About 7 years ago our son was involved in an auto accident with his grandmother. We were not sure of how to handle things so we got an attorney. The case was settled out of court and dismissed. So the courts no longer have it on record. I have the entire case from attorney, whom at that time told us we had to put in account for our son. we thought we doing the right thing. Little did we know that we would not access to it to be able to buy him things. We wrote a letter to judge as we were instructed to do. The judge told us that there was nothing we could do but try to get another lawyer to help us. By no means are we talking about lots of money… only a little over a thousand! The attorney back at that time told us that we did not have a say in matter!! Told us to sign the papers, what bank it was to be placed in, and that if we did not do what he said that our son would not get his settlement. We are at aloss as what to do now… tried talking to this law firm but they are of absolutley NO help. Do you have any advice for us? at this time anything would be greatly appreciated!!!! thank you for your time and look forward to your response.

    • says

      @Susannah I wish I could be of help, but your situation is out of my expertise. I would suggest keep calling different attorneys and hopefully you’ll find someone that is willing to help.

  2. dk says

    Well, my daughter’s father was killed and she received a large insurance settlement which was set up in an annuity. There was a lump sum placed in a guardianship account with limited access. Also, an annuity interest check was sent to me as guardian of the estate of my daughter monthly. I was told by the lawyer, before receiving any funds that I could do with the annuity interest as I please and it was not placed in the guardian account. I have not filed accounting for these funds for over 9 years and have used the money to maintain standard of living. Now I am finding out that I could be prosecuted for this and may have to pay the funds back, which would bankrupt our family. I in know way would have kept the money had I known that it was supposed to sit in an account. To say that now sounds naive but I was 25 when this all took place and this is the first time any accounting has ever been requested (and I have been filing accounting for the other account every 2 years). I am scared and feel like I was misled or the checks were not worded the way that was originally agreed. My lawyer also tells me that he now may be a potential adverse witness so I need to seek other council. Please advise.

  3. Ashley says

    Hello, I am a 2o year old from Indiana and when I was six years old I was hit by a car and broke my femur. The person that hit me payed for my medical expenses and such, but there was money left over from it all, for grievences, I suppose, and the extra was set up in a gaurdianship account as me as the beneficiary. Due to my parents lack of credit no bank would open an account for them so our lawyer was kind enough to help my parents get through all the loop holes. I was always told when I turned 21 I would have access to these funds myself. Now that day is almost upon me and I have no clue how I am susposed to go about gaining access to it. I tried calling the lawyer but I get brushed aside and told to wait for him to call since “it’s such an old case file.” What can I do?

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