[WSBAPT] UTMA question

[Sharon Rutberg]

Greetings -

Client deposited funds into UTMA accounts for two children (one now age 16 and one now 18), not realizing that she was making present irrevocable gifts. She is the custodian. She would like to pull the funds back out and make the gifts via her Will after death instead. (She would rather keep control of the funds for now, and she does not want the kids to have unrestricted assets to them at age 21 or 25.) Has anyone run across such a scenario?

It appears that if she transfers the assets back to herself she risks a liability claim by one of the kids when they reach majority, although the family circumstances make it seem unlikely that such a claim would be brought. Maybe she could ask them to sign waivers? Does she have any other options? Could she, for example, move the assets to a 529 account so that the children can't access them for anything other than education? Could she move them into a trust?

I appreciate your thoughts.

Sharon

Sharon C. Rutberg, Attorney at Law
Salmon Bay Law Group, PLLC
1734 NW Market St.
Seattle, WA 98107
206-735-3177, ext. 2
sharon at salmonbaylaw.com<mailto:sharon at salmonbaylaw.com>
Website: www.salmonbaylaw.com<http://www.salmonbaylaw.com/>
Washington State Bar #47055

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