California law allows,
in some situations, a trustworthy adult to take responsibility for
some or all of a minor's affairs after the child's legal guardian
passes away. The law refers to these legal arrangements as
guardianships. One of the main types of guardianship is known as a
guardianship of the estate. Here are some frequently asked questions
about this important legal concept.
What Is a
Guardianship of the Estate?
A guardianship of the
estate is a court-approved arrangement where a designated adult is
given the responsibility of overseeing the financial assets and
property of a minor. California probate courts administer the process
to make certain the child's interests are protected. The
court-appointed guardian can be a parent, but need not be.
Often, the person who
has physical custody of the child is the guardian of the estate as
well, although this is not always the case. Typically, a guardian of
the estate is appointed when a child comes into possession of
significant financial assets, such as when a minor inherits a large
estate upon the death of a relative.
What Are a Guardian
of the Estate's Responsibilities?
California probate law
requires estate guardians to manage the financial affairs of the
minor child prudently. For example, if a guardian makes investments
on behalf of the child, those investments must not be speculative or
reckless. Instead, the guardian is expected to make sound and safe
investments that do not risk large losses.
Separation
An important part of
managing the estate prudently involves keeping accounts separate. A
guardian has the duty to make sure that the child's financial
accounts are not connected with the accounts of any other individual,
including the guardian.
Inventory
One vitally important
responsibility of a guardian of the estate is to create a complete
inventory of all of the estate's property and assets. The guardian's
legal duty is to locate all of the assets that legally belong to the
minor and keep accurate financial records of any and all transactions
that involve the estate.
Filing
Another legal
requirement is that the guardian file an accurate report of the
estate's status on a regular basis. The first report is due in a year
after the guardian is appointed. Afterward, a report is due every two
years. The guardian doesn't have to file a report, however, if all of
the estate's assets are in so called blocked accounts.
What Is a Blocked
Account?
In some instances, if
the court administering the guardianship feels it's warranted, the
judge may order that some or all of the financial accounts of the
estate are blocked. A blocked account is one in which no person may
withdraw the account's funds without the approval of the probate
court.
If a guardian believes
that they have a good reason to withdraw funds from a blocked
account, they must file a petition in which the reason for removing
the funds is explained. If the judge agrees with the guardian's
explanation and grants the petition, then the block is lifted.
When Does the
Guardianship End?
A guardianship of the
estate ends when the minor who owns the estate turns 18. At that
point, the individual is now a legal adult and the law assumes that
they are capable of managing their own affairs.
If a guardian wishes to
end the guardianship before the minor turns 18, they must file a
final report with the probate judge and request that they are
discharged.
Anyone appointed as the
guardian of an estate in California will need expert legal advice,
such as that offered by the Law Office of Carla D. Allen, to navigate
the complex waters of this important area of probate law. Contact
us
to learn more.
