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Home >> Accounts >> Certificates of Deposit
Accessing Inherited CD for Minor
My eight year old daughter has a CD from her grandma, who is deceased. We are told we need court documents proving guardianship for only $1500. Is there an easier way to get this money for my daughter?
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 We need to fill in some blanks with some assumptions. One assumption is that the certificate of deposit was owned by your daughter's grandmother and had been designated by her grandmother to be payable to your daughter on her (grandmother's) death. Under that assumption, the bank holding the CD account may be unwilling to simply transfer ownership to your daughter, given her age, so the bank is looking for a legal guardian to take control of the CD on her behalf.
You can ask the bank to consider transferring the ownership of the CD account to a trusted adult, presumably you or another member of your daughter's family, but not necessarily so, as custodian for your daughter, under your state's Uniform Transfers to Minors Act (in two states, it's called the Uniform Gifts to Minors Act). That gives control of the account to an adult, but beneficial ownership of the funds to your daughter. Under such arrangements, the custodian holds the funds for the benefit of the minor until the minor reaches the age of 18 or 21 (varies by state), at which time the custodian transfers ownership to its rightful beneficiary. There is no cost involved in such a transaction, and the custodian would be able to use the funds only on behalf of the child. (Withdrawing funds to give to the child would also be permitted.)
Published on BankingQuestions.com 5/07/09
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