Vermont Guardianship and Bank Accounts: Managing Finances for a Disabled Adult

One of the most immediate practical shocks families face when a child with a disability turns 18 is the bank account. The joint account you opened when your child was 14 does not work the way it used to. Your adult child is now a legal co-owner with full rights to the funds, and the bank has no obligation to notify you about withdrawals, account changes, or suspicious activity. At the same time, your child may be vulnerable to financial exploitation. Understanding your options in Vermont is the first step toward protecting them.

The Joint Account Problem

Many parents set up a joint bank account with their minor child to manage allowances, SSI deposits, or savings. When the child turns 18, the account dynamics change. Your adult child can:

• Withdraw the entire balance without your knowledge or consent
• Add other people to the account
• Change the account's settings, including removing you as a joint holder
• Be targeted by scammers, manipulative acquaintances, or predatory businesses who know they have access to funds

The bank cannot restrict your adult child's access to their own account simply because they have a disability. Without a legal framework in place — a power of attorney, representative payee designation, or guardianship order — the bank treats your 18-year-old the same as any other adult customer.

Financial Powers Under Vermont Guardianship

If the court grants you guardianship with financial supervision authority under 14 V.S.A. § 3069(c), you gain legal control over your ward's finances. This includes the ability to:

• Open and manage bank accounts in the ward's name
• Receive and deposit income (other than SSA benefits, which require a separate representative payee appointment)
• Pay bills and manage expenses on the ward's behalf
• Make investment decisions within the scope of the court order

Once you have a guardianship order with financial powers, you can present it to the bank to establish a guardianship account — an account held in the ward's name with you as the court-appointed fiduciary. The account's access and control must follow the specific powers in the court order; the ward retains all other legal and civil rights.

If the court requires a guardian's bond, it is a financial guarantee protecting the ward's assets against mismanagement. The bond amount is typically set based on the value of the ward's assets, and the cost of the bond premium is paid from the ward's estate.

Alternatives to Guardianship for Financial Management

Full financial guardianship is the most restrictive option. Vermont law requires the court to consider less invasive approaches first:

Durable financial power of attorney. If your young adult has the cognitive capacity to understand what they are signing, a durable financial POA under 14 V.S.A. Chapter 127 lets them appoint you as their financial agent. You can then manage their bank accounts, pay bills, and handle financial transactions without any court involvement. The key requirement is that the person must have capacity at the time they sign the document — once signed, it remains effective even if they later lose capacity (that is the "durable" part).

Representative payee. If the only money to manage is SSI or SSDI, an SSA representative payee appointment handles it without touching the state court system. You apply directly at the Social Security office, and SSA deposits the benefits into an account titled to the beneficiary and managed for them by the payee.

ABLE account. Vermont residents can open an ABLE (Achieving a Better Life Experience) account, which allows a person with a disability to save up to $100,000 without affecting SSI eligibility. The account holder can designate an authorized signer to manage the account on their behalf, providing a savings vehicle with built-in financial oversight that does not require guardianship.

Protecting Against Financial Exploitation

Vermont families should be proactive about exploitation prevention, particularly during the transition to adulthood when the young person may not yet have strong financial literacy. Steps to consider:

• Set up account alerts — Most banks allow you to configure text or email notifications for withdrawals over a certain amount. Even without legal authority over the account, you can encourage your young adult to enable these alerts on their own accounts
• Limit account features — If your young adult agrees, set up an account without check-writing privileges, a low daily ATM withdrawal limit, and no overdraft protection. This limits the damage from impulsive spending or third-party exploitation
• Report suspected exploitation — Vermont's Adult Protective Services (through DAIL) investigates reports of financial exploitation of vulnerable adults. If you believe someone is taking advantage of your adult child, file a report through the APS intake line

The Vermont Adult Guardianship & Alternatives Guide includes a financial inventory worksheet and a decision matrix that helps you determine which combination of financial protections — representative payee, power of attorney, ABLE account, or guardianship — fits your family's specific situation. The goal is to build exactly the level of financial oversight your young adult needs without restricting their independence more than necessary.

The Separate Account Rule

Whether you end up with a guardianship, power of attorney, or representative payee designation, one principle applies across all of them: keep the ward's money in a separate account. Commingling their funds with your personal finances creates legal and accounting problems, makes your annual reporting harder, and can raise red flags with the court or SSA during review.

Open a dedicated account for the ward's funds, maintain clear records of every transaction, and keep receipts for major expenditures. This applies to guardians, POA agents, and representative payees equally.

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