Account Styling: Custodial Accounts
by Mary Beth Guard, BOL Guru
Question: A customer has some of her father's money and wants to set up a "custodial account" where the account is in her father's name but in her ssn and she is the only signer. Is this possible? If so, how should the account be opened?
Answer:
The short answer is "no". A true custodial account requires some type of legal basis. In the case of a person who is appointed guardian or conservator, there will be court documents evidencing their authority. In such a case, the account would be styled in the name of the ward, followed by the name of the guardian or conservator. Since the ward is the owner of the funds, the ward's social security number would be used.
The woman cannot appoint herself as her father's custodian. There is no such thing as a "Uniform Transfers to Adults Act" that would be a corollary to the Uniform Transfers to Minors Act. She could set up an account where she is the owner of the funds and the funds pass to her father upon her death (a Totten trust account), but it doesn't sound like that fits the situation.
You'll need to visit with the customer to obtain more information about what her objectives are before you can determine the best way to set up the account.
The original version appeared in the January/February 2003 edition of the Oklahoma Bankers Association Compliance Informer.
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