Re: persfin-digest V5 #65

From: NEGross@aol.com
Subject: Re: persfin-digest V5 #65
Date: Mon, 9 Nov 1998 11:27:40 EST

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In a message dated 98-11-09 11:10:57 EST, you write:

<< A relative set up UGMA accounts for my sons, 10 and 15, with herself as
 the custodian.  The relative has since passed away.  The accounts are in
 the form of CDs. 
 
 We have the CDs, but the bank says we can't cash them unless we "petition
 the court" to be named custodian for my younger son, and unless my older
 son does his own petition.
 
 We live in Massachusetts and the relative lived in Minnesota.  The bank is
 in Minnesota.  Which court do we petition and what's the format for doing
 this?
 
 - -- Nancy Slator, neslator@amherst.edu >>

Putting aside the legal issue for a moment, this question raises a very
important planning issue - the naming of a custodian for UGMA/UTMA accounts.
One should NEVER have the person that establishes the account (ie contributes
the money) also be the custodian.  If they are one and the same,the account
balance goes into the estate of the custodian (if he/she dies before the minor
reaches the age of majority).  So in addition to the problem Nancy is facing,
there could be estate tax problems if Nancy's relative left a sizeable estate.



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