Is it permissible to style an account as a "minor by" but using the social security of the minor, not the adult signer? I've read about "minor by" using the adult signers SS, but not the other way around.

The account name is not styled like an TXUTMA account, but since it is under the minor's SS, does it still fall under TXUTMA?

Is it a violation or not permitted by Texas law they we are are currently styling the account name for minor accounts - Name of minor, minor by custodian name - using the minor's SS number.

thanks,

As far as I am aware, there is no such thing as a "minor by" account in Texas or any other State for that matter. This is something that banks have dreamed up and therefore is going to leave you in no-mans land in the case of a dispute.

We got it from a seminar manual "Texas Deposit Documentation" and it mentions "minor by" accounts setup with the social security number of the custodian. It states that the ownership of the funds belong to the adult signer and not the minor. Since accounts have been opened using the social security of the minor (instead of the custodian), we thought that maybe the ownership of the account belongs to the minor and we would be okay.

It appears our new account reps want to do it as a TXUTMA account, but are styling the name incorrectly.

Do we need to correct the name styling so it can qualify as a TXUTMA account?

thanks,

Using the social security number of the minor on a "minor by" account could lead to the IRS treating the account as an attempt at tax evasion. My advice? Don't set up "minor by" accounts. Further, I agree with Randy. They are a no-man's land in case of dispute. And likely a no-man's land with respect to FDIC insurance coverage. Your customer may requests them. Your bank may have opened them for years. You may have never had trouble with your minor by accounts, But if you've never had trouble, you've likely never had a dispute or the scrutiny of the IRS.

It appears our new account reps want to do it as a TXUTMA account, but are styling the name incorrectly.

Do we need to correct the name styling so it can qualify as a TXUTMA account?

I would not suggest changing these accounts without the full agreement of the customer. Changing them to a TXUTMA account creates a non-revokable gift to the child.