[WSBAPT] UTMA question

[Andrekita Silva]

  Sharon,

I don't know about liability issues, etc. prior to age 23.
However, on the child's 23rd birthday, any funds left in that account  
actually become the chlldren's. The financial institution freezes the  
account, sends the child an application to put the funds in the  
child's name as their own funds outright, not in trust, and that's that.

That was the case as of about 5 years ago anyway.

andrekita
Law Office of F. Andrekita Silva
1325 Fourth Avenue, Suite 2000
Seattle, Washington 98101
206-224-8288
www.seattle-silvalaw.com

Quoting Sharon Rutberg <sharon at salmonbaylaw.com>:

> Greetings –
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>    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?
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>    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?
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>    I appreciate your thoughts.
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>    Sharon
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>    Sharon C. Rutberg, Attorney at Law
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>    Salmon Bay Law Group, PLLC
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>    1734 NW Market St.
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>    Seattle, WA 98107
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>    206-735-3177, ext. 2
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>    sharon at salmonbaylaw.com
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>    Website: www.salmonbaylaw.com[1]
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>    Washington State Bar #47055
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Links:
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[1] http://www.salmonbaylaw.com/

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