Answer by Randy Carey:Specific answers to these questions will be based on State law and you should consult your legal counsel.
Answer by John Burnett:With respect to your fourth question, even if the beneficial owner of an UGMA or UTMA account reaches the age for release of the property, it is the custodian's responsibility, not the bank's, to turn the funds over. In some states, the age of release will depend on the source of the funds in the custodial account, and the age of release may actually be set by the transferor of the property in some cases. In other words, you may not be able to determine from documents in your possession, when the correct age has been released.
For all those reasons, I would not recommend acting on the request of the beneficial owner, but would require that the custodian act instead, unless a court order directs differently.As for changing the account from one form of ownership to another, it's simply a bad idea. Close the custodial account out when the time comes, issue a check as the account was styled (unless ordered by a court to issue it differently), and let the custodian endorse the check over to the beneficial owner, who can then open a new account. That gives you much better audit trails and documentation.
First published on BankersOnline.com 2/01/10