UTMA Account Activity

Posted By: 2old2new

UTMA Account Activity - 06/30/14 04:51 PM

We recently had an auditor question us about UTMA savings account activity. In his review of one acct he found questionable withdrawals ($3500) for a parent IRA and other larger withdrawals. There was a large deposit made that was not seemingly the child's funds. I would like to know if other banks monitor these accts, talk with custodians, or file (his recommendation.) Upon reviewing, I do not feel this type of acct should be opened for the average minor acct/with small balances. Thanks for any insight.
Posted By: Elwood P. Dowd

Re: UTMA Account Activity - 06/30/14 05:44 PM

Your bank has no express or implied responsibilities to monitor activity in any fiduciary account including UTMAs. However, if you come across suspicious activity you cannot ignore it without taking significant financial and regulatory risks.

Your auditor could appropriately say you need to evaluate a situation for SAR filing, but it's beyond his or her authority to tell you what your decision should be.
Posted By: 2old2new

Re: UTMA Account Activity - 07/08/14 05:02 PM

Thank you, Ken. If we decided that the funds were not properly handled in a UTMA acct, what type of suspicious activity would this be for item 29-38? Thank you.
Posted By: CML LHS

Re: UTMA Account Activity - 03/31/16 08:30 PM

I know this is an old thread, but we are in this situation now. What did you choose to file as the activity? Did you choose Misuse of position or self-dealing, or just transaction with no apparent economic, business, or lawful purpose? We are also filing for structuring.

Any help would be appreciated!!
Posted By: Elwood P. Dowd

Re: UTMA Account Activity - 03/31/16 09:09 PM

For me, 35(e) embezzlement/theft/misuse of funds and 35(z) breach of fiduciary duty.

I acknowledge that 35(j) misuse of position or self dealing is accurate, but I shy away from it because it's the language normally used to describe misconduct by a bank employee, not a customer.

Keep in mind, they created this fuzzy mess with all of the check boxes. If the person looking over your shoulder disagrees with your choice just say, "Oh, I'm so glad to know that, I couldn't find that anywhere! Where did you find it?"
Posted By: CML LHS

Re: UTMA Account Activity - 03/31/16 09:40 PM

Thank you so much!