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Handling checks payable to a minor or custodian

If a check is made payable to the minor or the custodian on behalf of the minor, can the custodian cash it?

No. The check should be deposited to an account of the minor or a custodian account for the minor, such as a UTMA account. Cashing the check for the custodian or depositing it to the custodian’s personal account would put the bank on notice of a breach of fiduciary duty by the custodian under section 3-307 of the Uniform Commercial Code.
Learn more about Mary Beth Guard’s webinar
Safely Banking Minors

First published on 09/16/2018

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