Which statement describes a Guardianship Account?

• A. Interest in Lawyers Trust Accounts (IOLTA)
• B. Opened by an entity to conduct business
• C. Guardian manages funds for ward of the state or legally incapacitated person
• D. Adult maintains control until minor reaches adulthood

Answer: (C)

A guardianship account is a fiduciary arrangement where a court appoints a guardian to manage the financial affairs of someone who cannot handle them themselves, such as a minor or a legally incapacitated person. The guardian’s role is to protect and use the ward’s funds for the ward’s benefit, often under court oversight. The statement that describes this is that a guardian manages funds for a ward of the state or legally incapacitated person, which is precisely what a guardianship account is meant to do.

The other descriptions point to different kinds of accounts: IOLTA is a lawyer’s trust account for client funds, not a guardianship setup; an account opened by an entity to conduct business is a standard business account; and an adult maintaining control until a minor reaches adulthood describes custodial accounts (UGMA/UTMA), which are not guardianship arrangements.