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#721914 - 04/25/07 06:54 PM Truth in Savings
Cattitude Offline
New Poster
Joined: Apr 2007
Posts: 4
Is it legal to use a GTMA as overdraft protection on the custodian/guardian's checking account? This would be where the GTMA automatically transfers funds to cover overdrafts.

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#722155 - 04/26/07 02:37 AM Re: Truth in Savings Cattitude
Jan94 Offline
Platinum Poster
Joined: Mar 2001
Posts: 828
My understanding is that the GTMA would require the custodian to use the funds for the use and benefit of the minor, rather than for the custodian's personal benefit. If the funds are misused by the custodian, and the minor has reached 14 years of age they may have the right to sue. The responsibility is placed on the custodian, rather than the financial institution, to use the funds in accordance with the statutory requirements. Someone else may have some other information, but you really need to check with your legal counsel before you use this type of account for overdraft protection.

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