Rights of a Custodian to a UTMA Account
Answer by John Burnett, BOL Guru Guru Bio
Question: I have a customer who came in last week to cash a check made payable to his minor child, using a UTMA savings account that he has opened for his child at our bank. He endorsed the check on the back with his fullname and also wrote "sign for + his child's full name". As far as I know, if a check is made payable to a minor who has a UTMA account, the check should be deposited to the UTMA account and cannot be cashed. On the other hand, it is said that only the custodian of the UTMA account can have full access to the account, which means to me that he can cash the check made payable to his minor child. How should I understand the rights of a custodian to a UTMA account correctly?
Answer: Cashing a check is not a right of account ownership. Banks cash (not on-us) checks payable to their customers as an accommodation, not as a service that must be provided to those depositors.
If a check is payable to minor, it's payable to the minor, not to his parent or to the custodian of an UTMA account maintained for the minor. If the minor can sign his/her name and can be identified as the payee of the check, the minor is the proper individual, IMO, to cash it. If the minor can't sign his/her name, it's not uncommon for a bank to allow a parent to sign for the minor, whether or not state law gives a parent that authority.
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