Could anyone point me in the right direction on when we should be using Minor and when we should be using UTMA?

I haven't been too successful in finding a straight answer when I've searched different sights.

Please help.

A UTMA is a specific account defined by your State statutes.

"Minor" accounts have no legal standing.

Thanks rlcarey. (I've been on vacation)

Can you expand on the "Minor". Do you mean that any type of monies can be deposited into the account (b-day money, paper route money, etc)? Can we still use a custodian as the only signer for withdrawals?

Thanks for any further guidance you can give me.

In some States a minor can be treated as an adult when it comes to a deposit account. A quick search in the Wisconsin statutes did not locate such a provision, but I am not that familiar with Wisconsin law.

An adult can open an account, but it will be the adult's account, not the minor's. In order to preserve the minor's money separate from the adult's it would have to be in a UTMA or under some other official custodian relationship. But those accounts have specific requirements and ramifications and should only be opened by a parent after consultation with a financial planner and/or an attorney. Not through any advice offered by a financial institution.

I see a lot of banks that have accounts titled such as Joe Kid, minor by Joe's Mother. There is no legal basis for such an account in any State of which I am aware.

Here is a scenario I received today. An UTMA in Wisconsin opened when a minor was 15 with mom. Minor moved out of her house at 16 and never had access to the account. The child has now turned 18 and the mother sent him overdraft letters equalling up to $500.00 from the UTMA savings account. (First communicaiton with her since he left) What liability does the 'now 18 child' have for these items and can the bank send him to chex system or other collections.

thanks

"The child has now turned 18 and the mother sent him overdraft letters equalling up to $500.00 from the UTMA savings account."

I don't understand - what do you mean she sent him overdraft letters??

He needs to consult an attorney and sue his mother if she breached her fidciary duty under the UTMB statutes if the money did not benefit the kid. These are irrevocable accounts. I would not report the kid to Chexsystems - he had no access to the account and was only the beneficiary.

"A minor is not personally liable for an obligation arising from ownership of custodial property or for a tort committed during the custodianship unless the minor is personally at fault."

If the bank allowed the UTMA to go into overdraft in the first place, they might as well charge it off now as they most likely would have to sue the custodian for recovery.