Sep222025
Estate Planning Q&A Series

Can I give my children access to our bank account now to avoid a guardianship proceeding? – North Carolina

Short Answer

In North Carolina, adding children as joint owners is not the best way to avoid a future guardianship. Use a durable financial power of attorney for access while you are alive, and use payable-on-death (POD) designations to a trust or a UTMA custodianship for a minor after death. For small amounts to a minor, the Clerk of Superior Court can hold certain funds without appointing a guardian. These tools avoid the cost and oversight of a guardianship of the estate.

Understanding the Problem

You want to know whether you can give your children access to a North Carolina bank account now so you can avoid a court guardianship later. You are two spouses planning wills and a minor’s guardian, with a small joint bank account, one owned car and one financed car. The narrow question is: can you give your adult children account access now to avoid a minor’s guardianship if both parents die?

Apply the Law

North Carolina law offers several ways to avoid a guardianship of the estate for a minor who might receive money. A joint owner is different from an agent: a joint owner becomes a co-owner and may inherit the funds at death, while an agent under a power of attorney can help manage funds for you during life but has no ownership. For minors, banks typically won’t let a child own a standard account; instead, use a custodial account under the Uniform Transfers to Minors Act (UTMA) or route funds to a trust. If a minor nevertheless becomes entitled to funds, the Clerk of Superior Court can receive and manage certain amounts without appointing a guardian. The main forum for guardianship or clerk-held funds is the Clerk of Superior Court; key triggers include your incapacity or death, and a child’s age 18 or 21 depending on the tool used.

Key Requirements

  • Use an agent, not a co-owner: Name a trusted adult child as your agent under a durable financial power of attorney for access while you are alive; avoid adding them as a joint owner.
  • Designate beneficiaries: Add payable-on-death (POD) beneficiaries to your account; for a minor, name an adult custodian “under the North Carolina UTMA,” or direct funds to a trust.
  • UTMA custodianship: A custodian can receive, invest, and spend custodial property for the minor’s benefit and must turn it over when the child reaches 21.
  • Small distributions to a parent/guardian: If a minor receives a small legacy under $1,500, the personal representative may, with clerk approval, pay it to a parent or preexisting guardian instead of opening a guardianship.
  • Clerk-held funds for minors: Up to $50,000 per source can be paid to the Clerk for a minor without a guardian; the Clerk may disburse for necessities and releases the balance at age 18.
  • Debt exposure of nonprobate accounts: Funds in joint or POD accounts can be recovered by the estate if needed to pay valid estate claims when other assets are insufficient.

What the Statutes Say

Analysis

Apply the Rule to the Facts: With a small joint bank account and two adult children, adding a child as a joint owner now would shift ownership and may cause that child to inherit the funds at death, which can upset your will plan and expose funds to the child’s creditors. Instead, keep the account in your names, sign durable financial powers of attorney so an adult child can help during any incapacity, and add POD designations that send a minor’s share to a UTMA custodian or to a trust in your will. If a minor nonetheless becomes entitled to a modest amount, the Clerk can receive funds or approve small payments without a full guardianship.

Process & Timing

  1. Who files: You. Where: Your bank or credit union. What: Update beneficiary designations (POD) and ask for UTMA custodian language for any minor beneficiary; execute durable financial powers of attorney. When: Before any incapacity or death; changes take effect immediately upon acceptance by the bank.
  2. If both parents die and a minor is named outright: The personal representative may request the Clerk of Superior Court to receive funds for the minor (up to $50,000 per source) or seek clerk approval to pay a sub-$1,500 legacy to a parent/guardian. County practices vary; expect several weeks for review.
  3. Final step: For UTMA, the custodian manages funds until the child turns 21. For clerk-held funds, the Clerk releases the balance at 18 (earlier disbursements require proof of necessity). For trusts, the trustee follows your will’s terms.

Exceptions & Pitfalls

  • Adding a child as a joint owner can unintentionally disinherit others and expose the account to the child’s creditors, divorce, or bankruptcy.
  • Without UTMA or a trust, naming a minor directly as POD beneficiary can force a court process; use a custodian or trust designation.
  • Nonprobate accounts are not immune from estate debts; the personal representative can recover funds if other assets are insufficient.
  • Poor documentation: beneficiary or UTMA language must be on the bank’s agreement and signed as required; otherwise, it may be invalid.
  • Procedures and dollar thresholds can change; confirm current limits with the Clerk of Superior Court or counsel.

Conclusion

To avoid a North Carolina guardianship of the estate for a minor, do not add children as joint owners. Instead, use a durable financial power of attorney for access while you are alive, and use POD designations that route any minor’s share to a UTMA custodian or to a trust. If a minor still receives funds, the Clerk can hold limited amounts without a guardianship. Your next step: update beneficiary designations and sign powers of attorney now.

Talk to a Estate Planning Attorney

If you’re dealing with how to give children access to accounts without triggering a guardianship, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at [919-341-7055].

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.

Category: Estate Planning Q&A Series

Author: jpierce

Attorney Jared Pierce is the founder of Pierce Law Group in Raleigh, North Carolina, a firm he established with a dedicated focus on probate administration and estate planning across North Carolina. Born and raised in the Republic of South Africa, Jared moved to Durham with his family in 2001, bringing with him a rich cultural background and a distinctive accent that often serves as a conversation starter.