The parent is a repeat overdrafter with thier DDA. The parent is also joint owner in 3 childs savings accounts. #1 can we take funds from these savings to cover the overdrafts in the parent DDA? #2 can we freeze the childs accounts until the DDA debt is paid? (so the parent cannot move the funds and leave us with the debt)

Does your Account Agreement give you the right to set-off against all accounts owned by the customer? If so, you should be fine.

Just be on guard for the reputational fallout when Johnny goes to the press with the fact that you stole his $200 that earned this summer mowing lawns.

Are OD being paid on the parent's account? Do you have the ability to remove bounce protection and return items if there aren't sufficient funds? You would only be out fees and not principal if the customer walks

If the bank provides any kind of "overdraft privilege" type service on the parent's account, I think the bank would be on really thin ice if it allowed such an overdraft and then decided to use offset against the kids' account to recover the debt. It might win the court case, but it would lose in the court of public opinion.