Death of Custodian on UTMA
by John Burnett, BOL Guru
Question: If a custodian of a UTMA account passes away and no successor custodian is appointed, who is the appointed "guardian" of this account? The beneficiary is only seven years old. Would this need to go to an attorney and then the court will appoint a custodian for this account?. Can the parents of the beneficiary appoint a new custodian on this account?
Answer: You should check the version of the Uniform Transfers to Minors Act in effect in your state.
In general, if a custodian dies without having effectively designated a successor and the minor is 14 years old or older, the minor may designate as successor custodian an adult member of the minor's family, a guardian of the minor, or a trust company (from Massachusetts' version).
If the minor has not yet attained the age of 14 years, or fails to act within 60 days of the death of the custodian, the guardian (if there is one) becomes the successor custodian under Massachusetts law. If there is no guardian or the guardian declines to act, the transferor, the legal representative of the transferor or of the custodian, an adult member of the minor's family, or another other interested person may petition the court to designate a successor custodian.
Note that a parent of the minor is not the minor's guardian unless so designated by the court (in our case, the Probate Court).
First published on BankersOnline.com 1/5/04