I learned that my recently passed father left some of his estate and assets as beneficiaries to my two children; one daughter 19, and the other son 13. These include two accounts at one bank in California; one a savings, and the other an IRA.
I understand that my daughter can more simply transfer her portion to herself at any time. However as for my minor son the bank is requiring "guardianship paperwork/court signed stamped documents/letter of legal guardian" stating only this will allow me to assist with or obtain the two accounts for my son until he is 18.
I tried to look into this and it appears to be very confusing, time consuming, costly, etc. I am the legal guardian as I am the actual father yet the bank says that this along with my son's birth certificate will not suffice.
I am hoping there are easy instructions on how to obtain what the bank requires, and or other means to deal with this. Perhaps leaving everything as is until my son turns 18 and he deals with it himself. But I'm not sure what implications there are to leaving the accounts alone for 4.5 years until that happens.
Please provide any and all information related to these topics, and thank you kindly.
1 Answer from Attorneys
Bankers are notoriously difficult to deal with upon the death of a customer. Families (like your father) go in and set up accounts (often styled "TOD" or transfer on death) in the hope the assets will automatically be released to their family upon passing. Actually, that seldom happens exactly as planned. Bankers hate to do anything that might be construed as within their discretion, as they fear they will make a mistake for which they, personally, will be held accountable by their employer. Imagine if the bank had to pay out the same account a second time because one of its employees accidentally let it go to the first person who stepped up and claimed it. Hence, they usually demand some sort of "court order" to direct them. Then, you see, it is not within their discretion and they are off the hook for "just doing what I am told by a higher authority."
I am sure you can picture the banker being nervous about what appears to be a single parent coming in and making demands in his child's behalf. What about the other parent? Can he be sure you have custody and are, indeed, the legal guardian of your son? Even if you hand him court documents demonstrating this, he will not wish to read formal, legal filings to determine what they say and mean. He will, at best, hand you off to the bank's legal department in some distant city and you can wait for an evaluation to be made (sometimes taking days). That is often the BEST case scenario.
This is not an easy thing and may well require the services of a knowledgeable attorney to walk the banker through it all. You and your kids may also benefit greatly from a financial advisor. For example, do not assume your daughter, because she is an adult, can just receive her share of the IRA account now. There may be severe tax consequences to her taking it as a lump sum, rather than rolling it over into a retirement account of her own, and you (and she) need clear answers on all of that. I certainly do not recommend waiting out your son's "coming of age," as the funds would likely be turned over to the state's "unclaimed funds" account and would be held (interest-free) by the government. That is, again, only in the interest of the bank that wishes to wash its hands of anything that is not ordered by a judge.
This is not a simple matter. It could require a probate of the assets, whether or not one was conducted of your father's other holdings. Your son presents different circumstances than your daughter (as you identify) but both must be properly handled to ensure they are not throwing away a chunk of their inheritance on unnecessary expenses and taxation. They need good legal, accounting and tax advice after a full consultation and review of the account documents.