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Question & Answer
Question: About Guardianship Accounts: If the guardianship papers are issued in a state other than your own, do those papers qualify for an account in your state or are they only assigned in the state they are issued in? For example: If we are a bank in Indiana and a person brings in guardianship papers issued in Illinois, do those papers qualify for an account in our bank in Indiana?
Answer: Here's my understanding of the guardianship matter. There are two types of guardianship - guardianship over the person and guardianship over their property. If Granny lives in Illinois, a guardianship proceeding to appoint a guardian of her person in Indiana would not work. By the same token, if the court appoints a guardian over her property, that court order would only be valid in the state where it was issued. An ancillary guardianship would need to be initiated in the court in the other state where the property was found.
Having said that, I know of instances where the amount in the out-of-state account was small and the bank simply abided by the guardianship order and took a risk about its effectiveness, or obtained an indemnification agreement from the guardian whereby the guardian personally agreed to indemnify the bank for any losses or claims.
Copyright © 2000 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 10, No. 4, 4/00
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