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"Minor by" Account Questions
by Ken Golliher, BOL Guru

Question: When opening a minor savings account, what is the proper ownership and rights at death? If the account is title "Child's name, a minor by, parents name" would it be a multiple-party account with right of survivorship or would be a single account since it is using the minor's ss#?

Answer: My suggestion would be that you would never open an account, "Sally Doe, a minor, by Mary Doe" unless there is a specific state statute that recognizes that account title. Your questions illustrate the reasons why I would give that advice.

First, assuming "Mary" is a parent, as a parent I do not have the right to commit my children to a contract. Yes, I can sign them into the hospital and authorize all sorts of scary stuff, that's what a "natural" guardian does. However, to commit them to a contract I need a court order appointing me as their "financial" guardian. Second, since the adult is the sole signatory, has total control over the account and is under no legal obligation to ever deliver the funds to the child, it must be the adult's money. So, the appropriate SSN for the account is the adult's. Third, if the adult dies, my opinion is that those funds are part of the adult's estate for the same reasons it was appropriate to use the adult's SSN. The child's other parent (particularly one from a prior marriage) is unlikely to agree with my decision.

However, the point is, in the absence of a state law authorizing this account title, I am just making these answers up -- just as any bank opening these accounts has to do. When I make answers up, I take the risk that someone will disagree with them, saying their made-up answer is better than my made-up answer. It's possible that we will end up in court letting the judge decide which of us has the better imagination.

If your state has the UTMA account, that is the preferred method for setting up an account in the name of the minor and using the minor's SSN. Anything else is just make-believe.

First published on 11/3/03

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