Thread Options
#1381656 - 04/26/10 08:35 PM UTMA - Demand Deposit
Doug Hendrickson Offline
Power Poster
Doug Hendrickson
Joined: Oct 2009
Posts: 3,927
One of our New Accounts folks opened a UTMA account and titled it "name of minor, MINOR BY name of parent". This account is a Demand Deposit account. Before I go crazy looking, I thought that UTMA only dealt with time/savings accounts. This is a Demand Deposit account. A DDA for a 7-year old??????

Could use some guidance/reference here, thanks!
_________________________
I hear and I forget. I see and I remember. I do and I understand.--Confucius

Return to Top
Deposits and Payments
#1381676 - 04/26/10 08:40 PM Re: UTMA - Demand Deposit Doug Hendrickson
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,544
Cape Cod
If you check your state's version of the UTMA, I doubt you will see any restriction on account type. In most cases, any restriction has been a matter of bank policy. A transaction account might actually be the optimal account for a given situation.

The account styling you have cited isn't appropriate for an UTMA account in any event. It looks like someone has opened a "minor by" account, which simply is not supported by the laws of most states.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#1381688 - 04/26/10 08:49 PM Re: UTMA - Demand Deposit John Burnett
Doug Hendrickson Offline
Power Poster
Doug Hendrickson
Joined: Oct 2009
Posts: 3,927
John...as always, thanks...I check the NMSA and there does not appear to be an account type restriction, however the account should be titled:

"name of custodian" as a custodian for "name of minor" under the Uniform Transfers to Minors Act

I would then order checks in the name of the account so that it is clear that checks written are as custodian.
_________________________
I hear and I forget. I see and I remember. I do and I understand.--Confucius

Return to Top
#1381695 - 04/26/10 08:52 PM Re: UTMA - Demand Deposit Doug Hendrickson
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,544
Cape Cod
You got it, Douglas! But your question about whether it's the best account type choice may still be very valid. One thing I would watch for is to see if the activity in this account appears to be for the child's behalf, or if it might be a "safe haven" for the custodian or parent to be hiding funds from creditors. If the latter is the case, I'd consider kicking the account to the curb.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#1381700 - 04/26/10 08:56 PM Re: UTMA - Demand Deposit John Burnett
Doug Hendrickson Offline
Power Poster
Doug Hendrickson
Joined: Oct 2009
Posts: 3,927
My intent was to put it on a 'watch list' and monitor the activity for a while to see what types of debits/credits were being applied against the account. It opened for $500, which is not a heck of a lot, but bears watching. If it appears that the funds are not the type that would be in benefit of the minor, 'kick it to the curb' I will.
_________________________
I hear and I forget. I see and I remember. I do and I understand.--Confucius

Return to Top
#1381784 - 04/26/10 11:23 PM Re: UTMA - Demand Deposit Doug Hendrickson
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,596
Galveston, TX
I would get to the bottom of what is going on. Was this meant to be a UTMA account or not. If not, contact the customer, have them retitle the account accordingly or get rid of it. Your NA reps should also be counseled on not making up account types that are not sactioned by the organization or prevailing law.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1412091 - 07/06/10 07:53 PM Re: UTMA - Demand Deposit rlcarey
MHuff Offline
100 Club
MHuff
Joined: Nov 2006
Posts: 218
LA
My bank recently opened a checking account for a 4-year old who has cancer, with his mother as custodian. A debit card is also being used with this account. It was set up as Child's Name, Minor and Mother's Name, Custodian. I am wondering if this account should have been set up in the mother's name only, or perhaps in her name with the account title as "Medical Account" or something similar.

Any thoughts?
_________________________
CRCM

Return to Top
#1412284 - 07/07/10 01:57 PM Re: UTMA - Demand Deposit MHuff
BrendaC Offline
Power Poster
BrendaC
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
Start with the basic question...Who owns the money? That will lead you to your answer.
_________________________
Life without Jesus is like an unsharpened pencil - it has no point.

Return to Top
#1412687 - 07/07/10 11:07 PM Re: UTMA - Demand Deposit BrendaC
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,596
Galveston, TX
Unless there is some legal basis for the custodial account - this is the mother's money - period - end of story.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1412719 - 07/08/10 10:38 AM Re: UTMA - Demand Deposit MHuff
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Rule of thumb: If someone wants to use a fidcuiary title of any kind, they need a piece of paper that says they can do it. (With the UTMA, the piece of paper is the statute; the required mention of the statute in the account title incorporates it by reference.) You can't just plug "Custodian" into an account title on a whim.

As you mentioned the child's illness, I'm wondering if this account was not intended to be what is commonly called a "tragedy account."

"Child, a minor, by Mother as Custodian" means nothing or less than nothing; Louisiana law requires the mention of the statute in the account title if it is to be treated as a UTMA account.

As noted, it's the mother's money. Whether they understand it or not, contributors are giving money to the Mother to do with as she pleases. Your bank should make certain contributors do not get the impression that there is any assurance the funds will be used for the sole benefit of the child from your employees; e.g. checks should be made payable to the mother, not as the account is titled.
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top
#1414039 - 07/12/10 08:19 PM Re: UTMA - Demand Deposit Elwood P. Dowd
Doug Hendrickson Offline
Power Poster
Doug Hendrickson
Joined: Oct 2009
Posts: 3,927
In styling a UTMA account, can more than one custodian be named (e.g., mother and father as custodians for child under the (NM)UTMA) or is this a matter of state law?

Also, in a similar vein, I know that a successor custodian can be named, but I'm not sure if this becomes part of the account styling or is a separate document.
_________________________
I hear and I forget. I see and I remember. I do and I understand.--Confucius

Return to Top
#1414118 - 07/13/10 12:19 AM Re: UTMA - Demand Deposit Doug Hendrickson
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,596
Galveston, TX
State Law: Transfers to Minors, 46-7-1 through 46-7-34.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1414136 - 07/13/10 03:33 AM Re: UTMA - Demand Deposit rlcarey
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,544
Cape Cod
Successor custodians have no control over the account and should not be part of the styling. They get their names printed once they take over the custodian slot (if they do).
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#1414162 - 07/13/10 12:47 PM Re: UTMA - Demand Deposit Doug Hendrickson
waldensouth Offline
Power Poster
waldensouth
Joined: Nov 2001
Posts: 7,979
FINALLY ABOVE the gnat line
The states I'm familiar with only allow 1 custodian and 1 beneficiary. And, as John said, if a successor custodian is named, they have no rights on the signature card.
_________________________
"Once you learn to read, you will be forever free."

- Frederick Douglass




My Opinion Only.

Return to Top
#1414277 - 07/13/10 03:09 PM Re: UTMA - Demand Deposit waldensouth
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,544
Cape Cod
There one or two states that permit two co-custodians, but I'm not aware of any that would permit more than one beneficiary per UTMA account.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top

Moderator:  John Burnett