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Designating A New Custodian For An UGMA Account

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Question: 
We had a customer present to us a certificate account titled under the Uniform Gift to Minor's Act. The custodian named on the account died and there was no successor custodian named. The minor on the account is under the age of 21. Does this account have to remain in the name of the present custodian until the minor reaches majority? Or can another custodian be named? If so, how is another custodian designated?
Answer: 

Sorry, but without knowing which state's version of the UGMA you are talking about, there is no way to answer the question. Most states repealed the UGMA and replaced it with the UTMA several years ago. Custodians were allowed to stay with the UGMA's terms or "upgrade" to the UTMA by retitling the account.

In your case, clearly the custodian did not convert the relationship to the UTMA, so it is still controlled by the terms of the UGMA. If your state repealed it, the law is probably no longer published in your state's statutes and you will need to call your state's legislative research organization to get a copy. FYI, most states used 18 as the delivery age under the UGMA, so make certain you check that along with the provisions for appointing a successor custodian.

As an academic observation only, the model version of the UTMA would allow the beneficiary to appoint an adult member of his family as the custodian in these circumstances. If he did and the delivery age was past, the successor would simply make delivery as his only official act.

First published on BankersOnline.com 12/16/02

First published on 12/16/2002

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