The Elrod Firm


Do I Need Guardianship Over My Own Children?

Justin, My father named my minor children as beneficiaries on CDs he owned. My father has recently passed; I’m being told that I cannot get access to those funds unless I obtain a guardianship over my own children. Is this true? – Wayne

Wayne, Unfortunately, it is true, even though it sounds outrageous. A minor cannot inherit property before they reach the age of majority. The age of majority ranges from 18 to 21. To protect minors and still allow them to inherit property, Arkansas, and almost every other state, has adopted the Uniform Transfer to Minors Act (UTMA).

The UTMA is an act that allows minors to inherit property so long as an adult is appointed custodian of the funds. The idea behind this is that the custodian will use the for the benefit of the minor. The UTMA gives very specific instructions and language on how to transfer assets to minors. The language must specifically say “to John Doe (name of custodian), as custodian for Sally Anne (name of minor) under the Arkansas Uniform Transfers to Minors Act.” If the language is missing, the funds cannot be accessed until the minors reach the age of 21 or until someone is appointed guardian of their estate.

Here, your father made the CDs payable on death to directly to your minor children without including the required language. Even though you are their parent, you have no authority to access those funds. The only way to obtain access to those funds is to do a guardianship of the estate of your children.

Guardianship proceedings require going to court and means preparation of an annual accounting. This can be expensive and inconvenient. The best way for grandparents to leave assets to minors is for the grandparents to set up a trust. Trusts are flexible, avoid probate, and provide protections for minors and other beneficiaries.


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