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.
Carol J Johnson says
Hello. I live in Florida. I am a healthy widow, 76 years of age, and the legal guardian of a Great Grandson, now age 13. My only child cannot handle money, and I have nobody at this time to list as a Power of Attorney on a Will. What would be my best option of having a Will set up and somebody, personally unknown to me, that could act as a Power of Attorney if needed? Any suggestions would be helpful.
Carol Johnson
Jeff Rose says
Hi Carol – You really have to sit down with an attorney and make this decision. Since it will be a non-family member, it may need to be an institution. You’ll need help in making that decision. The bright side is that your great grandson is just 5 years away from adulthood, so it’s really a temporary problem. But you want to make sure you get it right, without causing long-term problems for him. That’s why you need professional advice. You may need to set up a trust rather than a guardianship account, but that’s for you and your attorney to decide.
Gladys Piggee says
I have legal guardianship over my nephew whom is grown but have a permentaly disability. My sister which is my nephew mother died April 19,2016 in a car accident and in her will I a was appointed gurdian over my nephew and following me was his sister. After the settlement of the lawsuit against trucking companies that hit the vechile my sister was in the lawyers us still holding my nephew 9 hundred thousand dollars claiming the father which gave up his rights to my nephew when he was born is now over his money and I nor his sister other my nephew hisself can get his money. The lawsuit case was closed in December of 2017. What can I do?
Jeff Rose says
Hi Gladys – Wow, that’s entirely a legal matter that I’m not qualified to answer (nor do I have one). For that kind of money, you might want to talk to another lawyer and get a second opinion. Or even a judge if you can.
Gladys Piggee says
Ok thanks
Rosemary Beltre says
Greetings, my name is Rosemary,
The process of opening a guardianship related bank account seems uncommon for a situation involving the elderly.
Is it a common service offered by most financial institutions?
My mom is still alive and with us, she simply is unable to conduct any business because of her dementia.
The courts are requesting that I obviously open a guardianship related bank account, and I am certainly willing to comply.
Any recommendations regarding what should be my proceeding steps?
Many thanks in advance,
Kindly,
Rosemary B
Jeff Rose says
Hi Rosemary – It sounds like you’re already at the point of needing to do this, if the courts are making the request. You need to sit down with a bank if it’s just one account, or a lawyer if it’s several. There are other considerations where a lawyer can help such as creating a living will.
londa says
HI my son will be19 in may he wanting enrolling in air force he has ADHD disability bad has problem with handling money , saving money paying bills ,responsibility wanted to get guardian ship over his military check until he learn how manage his own money and take care of his self is that possible
Jeff Rose says
Hi Ionda – I don’t think that’s possible. But you might have it direct deposited into an account that you control. You can then give him money as he needs it without turning the whole amount over to him.
Meechie says
Dear friend. My grandma had a guardianship account set up for my son .. she passed away , so I went and tried to have the account switched to my name because my son is 13. The bank told me I need a guardianship paper in order
To get access to the account. It’s not set up through court that she has a guardianship account for him , so how can I get access to this account and will I be able to use the funds.
Jeff Rose says
Hi Meechie – That’s really a legal issue, not a financial one. Please consult with an attorney in your state to determine the best course of action.
Dan says
We had a settlement with and put money away for our children. They way it was structured was so we cannot even borrow against it. We are trying to pay our children’s back school bill so they can register and are trying to figure a way to get the money. Any ideas?
Jeff Rose says
Hi Dan – It sounds like you made the account so airtight that you can’t access it. Usually, you can access the funds if they’re used to pay for the kid’s expenses. But you should check with the account trustee to see what your options are. Failing that, you may have to speak with an attorney to see if the laws in your state provide any options.
TAMATHY LEACH says
MY DAUGHTER WAS KILLED A YEAR AGO IN CAR CRASH SHE DID,NT HAVE ANY DEBTS SHE DID NOT OWN ANYTHING BUT SHE DID HAVE A QUIT CLAIM DEED FROM HER DECEASED HUSBANDS MOTHER FOR THE HOME SHE LIVED IN @ THE TIME OF HER DEATH BUT SHE NEVER FILED IT SHE JUST KEPT IN SAFE PLACE FOR OVER A YEAR THEN SHE GOT KILLED BUT SHE ALWAYS TOLD ME WHERE IT WAS BUT MY ? IS CAN I HAVE THE MOTHER N LAW QUIT CLAIM TO ME AND THEN SALE AND PUT MONIES IN A TRUST FUND FOR THE 4 REMAINING CHILDREN , I CALLED THE COURT HOUSE AND THEY STILL SHOWED THE MOTHER N LAW OWNED BUT HAS NOT HAD TAXES PAID IN ALMOST 3 YEARS AND I DO NOT WANT THE STATE TO SALE FOR TAXES WHICH THEY CAN IF NOT PAID BUT MY LAWYER FRIEND OF 27 YEARS IS TELLING ME THAT I AM NOT ALLOWED TO BE OVER HER PERSONAL THINGS AND I WANT TO KNOW WHY NOT ……………………THX !!!!
Jeff Rose says
Hi Tamathy – That’s a legal question that I can’t help you with. It also depends on the laws in the state where you live. It is true though that if the quit claim deed was never filed with the court house. As far as the court is concerned, the mother-in-law is still the owner.
Now since you want to sell the house and use the proceeds to provide for the children, perhaps her mother-in-law will cooperate in transferring the deed for the benefit of the kids. As well, if you offer to pay the back taxes, you may be getting her out of a jam. Since mom-in-law is still the owner, the tax lien is against her.
If you’re not satisfied with the advice that you’re lawyer friend gave, get another opinion from a different lawyer. But my guess is that you’ll have to work this out with the mother-in-law.
Tera Andrews says
My 15yr daughter’s dad was killed.She has about 18,000.00 in life insurance.My question is other than a restricted bank account or surety bond,are there other options in order for her to access her money for things she needs now or up until she’s18..What would be legitimate reasons for requesting funds since they are saying you cant use it for things such as food and clothes,which is so crazy being that if her father was alive,he was obligated to help provide for her.
Jeff Rose says
Hi Tera – I’d check with an attorney in your state. Laws are specific to each state so the answer might be a little bit different in each state.
Erica c says
I was legally appointed guardianship to raise my husband son whose mom was in a fatal car accident…at the time he was in the 3rd grade…my husband hid the fact that his mom had a large insurance policy for them that my husband was the beneficiary of..the childs biological grandmother got a family member in the courts to give her papers to oversee the money in the account that was for raising the child.because my husband faced life imprisonment…..they teamed up together and kept this a srcret from me for years..i suffered financially for13 years raising my son..he is 21 now..do i have any rights to the guardship money that was already spent for