Guardianship Frequently Asked Questions

Guardianships for a Minor

Guardianships for a Minor

1. How should a guardianship bank account be titled?

The accounts should be titled as “(Fiduciary Name(s)), Guardian for (Minor’s name), Minor” or similar language.

2. What is the difference between carrying value and market value when reporting on an account?

The carrying value is the fair market value of an asset when the guardian first gains control of the asset.  The carrying value will remain static unless funds are added to the account or withdrawals are made from the account. A bank account or a money market account will always have the same carrying value and market value.  Investment assets such as stocks or mutual funds fluctuate in value.  Real estate usually fluctuates in value from year to year.  For these assets, you will have a different carrying value and market value.

3. May I borrow money from the guardianship provided that I pay back the loan?

No. There are no circumstances which would allow a guardian to borrow the minor’s funds.

4. What type of investments are appropriate for a minor’s funds?

With the understanding that all funds must be turned over to the minor at age 18, we recommend that the guardian invest the minor’s funds in a conservative manner.  Of course, each situation is different.  Factors to consider would be the amount of funds available for investment and the length of time until the minor reaches age 18.  It is appropriate, and highly recommended, that the fiduciary consult with a financial planner in making decisions as to how the minor’s funds are invested.

5. Is it a requirement to distribute all the guardianship funds to the minor upon their 18th birthday? For example, can the money be held to pay for college or until age 21?

All the guardianship funds must be paid to the minor at age 18.