If you are the parent, relative, or caregiver of a minor child who has acquired assets, guardianship can protect that property from misuse. A guardian handles financial matters for children younger than 18 unless specified that the minor’s parents can take control of the money.
If your child or other loved one is a minor and is a beneficiary in a contract, will, or insurance policy, consider naming a guardian to manage the funds. These court proceedings can be complex, but a seasoned trusts and estates attorney could help. An Irvine guardianship lawyer could guide you through the process and ensure your loved one’s assets are protected.
What is Guardianship?
Guardianships protect minors’ inherited property even if an adolescent’s parents care for them. However, commonly set up by grandparents, a guardian can also care for a minor if their parents cannot. These types of proceedings are handled in probate court.
Guardian ad litems advocate for minors involved in court cases. The duties of this type of custodian depend on the circumstances of a case and their responsibilities end when a judge resolves the matter. Family law or criminal judges typically appoint guardian ad litems. For questions about financial guardianship, contact a skilled attorney in Irvine.
How Does a Guardian Retrieve a Minor’s Money?
The court can formally appoint a guardian to protect children and any money they inherit or receive through annuities or insurance payouts. However, parents cannot automatically collect a child’s inheritance. Instead, California courts issue Letters of Guardianship, which banks and insurance companies require before releasing funds allocated to a minor.
The court recognizes some exceptions to Letters of Guardianship that banks and insurance companies will honor, including:
- When an insurance policy or annuity benefitting the minor names a custodian to receive the payout
- If the payout to the minor is less than $5,000, the parents can collect it under California law
- When the policy or annuity names a parent as a minor’s custodian, enabling them to collect the proceeds
- If the minor is close to turning 18, the courts recommend waiting until the child is an adult, thus avoiding the complicated guardianship process
Unfortunately, many legal ramifications and nuances arise in guardianship petitions. For example, parents authorized as guardians cannot generally access the money to support the child beneficiary and must support the child with their personal funds. A hardworking lawyer could help protect a minor’s funds and advise parents on the guardianship process in Irvine.
California’s Bond it or Block it Rule
If a guardian wishes to access a minor’s assets for reasons that will benefit the child, they must be bonded. However, no bond will be required if they do not intend to access the assets kept in a blocked account. Most sureties demand that guardians who choose to be bonded work with an attorney during guardianship. This arrangement is called the California “bond it or block it” rule.
According to state law, the guardian must acquire a blocked account receipt from an FDIC-insured bank and cannot invest funds in stocks or bonds if held in a secure account. A diligent attorney in Irvine can discuss the merits and downside of bonding and blocking based on a person’s circumstances.
An Irvine Guardianship Attorney Protects a Child’s Assets
Sometimes minor children become beneficiaries in wills, insurance policies, annuities, and state benefits. Under California law, they cannot manage these assets alone and will need a guardian to help. However, many factors influence how guardianship is conducted.
The guardian may access the assets by being bonded or let the assets sit in a blocked account held in an FDIC-insured bank. If you are a guardian, contacting an experienced attorney could help ease the pressures of your role. The process is complex, but an Irvine guardianship lawyer can make it easier for you. Call today.
