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#2292113 - 01/03/24 02:29 PM POD on INUTMA Account
Bankwoman1 Offline
Diamond Poster
Joined: Dec 2015
Posts: 1,046
Midwest
We have a grandfather opening an INUTMA account for his grandson. He is asking us to add a parent of the child as a POD beneficiary to the account. I don't think I have ever had someone ask us to add a beneficiary to an INUTMA. I know state law governs these accounts and I did look at the Indiana Code. I didn't find anything specific in this section that states whether a beneficiary can be added or not. I did find the below:

IC 30-2-8.5-35 Termination of custodianship
Sec. 35. The custodian shall transfer in an appropriate manner the custodial property to the minor or to the minor's estate upon the earlier of:
(1) the minor's attaining twenty-one (21) years of age; or
(2) the minor's death.
As added by P.L.267-1989, SEC.2.
[b][/b]

My thoughts are that it is not allowed since IN code doesn't specifically state it can be done. Anyone else have any thoughts on this? BTW...I do have an email in to our attorney, just thought I would throw it out here on the forum also.

Thanks!

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#2292115 - 01/03/24 02:36 PM Re: POD on INUTMA Account Bankwoman1
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Never ran into this issue so I would be interested to see what your attorney has to say.

since IN code doesn't specifically state it can be done.

I look for what the code specifically says we cannot do.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#2292116 - 01/03/24 02:38 PM Re: POD on INUTMA Account Dan Persfull
Bankwoman1 Offline
Diamond Poster
Joined: Dec 2015
Posts: 1,046
Midwest
I look for what the code specifically says we cannot do.

Good to know! I will definitely let you know what our attorney says.

Thanks

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#2292117 - 01/03/24 03:08 PM Re: POD on INUTMA Account Bankwoman1
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Even though the code may not specifically prohibit the action you still need to take into consideration the potential legal risk to the bank if the specific action is taken.

IOWS, simply because the code doesn't say you can't do it doesn't necessarily mean you should do it without a risk assessment.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#2292118 - 01/03/24 03:19 PM Re: POD on INUTMA Account Bankwoman1
Bankwoman1 Offline
Diamond Poster
Joined: Dec 2015
Posts: 1,046
Midwest
I just spoke with our attorney and he said that once the funds were deposited into the UTMA account, then it becomes custodial property and must follow custodial rules. He stated he thought it would muddy the waters if we added a POD because if the minor passed away and we allowed a POD, the property would become non-probate property, and you can't turn custodial property into non-probate property. He didn't want us to get into a situation we shouldn't be in by allowing this.

I hope this makes sense. He was much better at explaining why he didn't think we should allow it.

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#2292133 - 01/03/24 07:18 PM Re: POD on INUTMA Account Bankwoman1
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Thank you for the follow-up. I'll pass this on to our deposit operational people.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#2292135 - 01/03/24 07:19 PM Re: POD on INUTMA Account Bankwoman1
Bankwoman1 Offline
Diamond Poster
Joined: Dec 2015
Posts: 1,046
Midwest
You're very welcome

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