Now, I realize that most children in foster care don’t have assets, but there must be situations like this:
A child’s parents both die. The child is the sole beneficiary of life insurance, sole heir of any money and property including a house. The child is also entitled to social security benefits for both parents.
There are no relatives or no relatives willing and/or able to take the child in and so the child becomes the ward of the state and goes into foster care.
Who liquidates the property? What happens to the money that belongs to the child? Is any of it taken by the state?
Any significant assets the child has would be put into a guardianship and overseen by the state court. There is a guardian appointed by the court, similar to an executor for a deceased person’s estate. The guardian is responsible for managing the assets, and distributing some or all of it to or for the benefit of the child until the child turns 18. At that point, the child must be given all of the assets, unless the child is incompetant or otherwise disabled.
The state does not receive anything other than small filing fees for establishing the guardianship.
I am an attorney, but not your attorney and this isn’t advice, et. al., all rights reserved, etc.