Guardianship accounts

When someone cannot manage their own finances, a court-mandated guardian may be appointed to oversee that person’s assets. Typically involving mental incapacitation or an inability to manage money, guardianship accounts are opened by financial firms when they receive proper court appointments. At that point, the account owner’s assets are placed into a guardianship account and can only be managed by the court-appointed guardian.

Guardianship accounts are also a type of fiduciary account. Similar to custodial accounts, they must avoid risky investment strategies involving things like short sales, margin, and some option strategies.