Restricted Accounts
Under the procedure set forth in Phila.O.C. Rule 12.5.C, a guardian may avoid the entry of security by depositing the assets of the estate into a restricted bank account. This alternative is utilized extensively by counsel in Philadelphia because of its simplicity and cost savings to the estate.

The procedure can be summarized as follows: It is initiated by a petition requesting the appointment of a guardian and authorization for the guardian to deposit the funds in a restricted account or accounts in lieu of the entry of security. Special care should be taken in preparing the decree so that the banking institution can release the funds when the minor attains the age of eighteen (18) years. The maturity date of any savings certificate should be selected so as not to extend beyond attainment of the age of majority.

After the decree is entered, the bank accounts authorized by the decree are established and the appropriate restrictions are typed on the passbook or certificate. The guardian need not file an inventory since no assets are “in his possession.” However, there is a duty to report all bank deposits to the Court. In Philadelphia, this is done by filing an affidavit of compliance which includes a copy of the Court order and a copy of the restricted account’s title page including the Court ordered restrictive language.

On the minor’s 18th birthday the account may be closed upon the joint order of the guardian and the former minor. There is no need for an accounting if no withdrawals are made during the guardian’s term.

If it becomes necessary to obtain an allowance, the Court must be petitioned accordingly, as set forth in paragraph D above. However, withdrawals from restricted accounts can be made without Court approval in order to pay federal and state income taxes. See Phila.O.C. Rule 12.5.6(5). Once withdrawals have been made, the guardian must petition the Court if a discharge is desired. A statement containing the same basic information as an account must be annexed as an exhibit to the petition for discharge. See Phila.O.C. Rule 12.5.C(3)(b).



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