Custodial Account

Custodial Account

I have set up a custodial account for my nieces from my mother's estate, and now their parents are in forbearance on their house and want part of the money what will this mean for me being the holder of the account ? I do not want to do this because it will not get them on their feet only enable them, plus the money was meant for the girls education!


The facts are a bit tough to follow but it sounds like you were th executor of your mother's estate, your mother's will provided for a distribution to her grandchildren, and that you made those distributions to custodial accounts for them, naming yourself as custodian. The children's parents (your mother's grandchildren; your neices) parents need financial help and are pressuring you to distribution the funds. Let's assume everything you did was correct as executor, making the distributions and serving as custodian. The funds in a custodian account are legally owned by your neices. You have no right to use the funds other than as your state's uniform gift to minors act (UGMA) (or other applicable law that may govern the account) permits. In fact, your neices, again depending on state law, may have the right to demand an accounting from you (formal records of what you did with the money) from age 14 on. As the cusdodian of the account, you are a "fiduciary". That means you must act with high standards to protect and properly handle the money that is rightfully your neices.

There sounds to be a moral component to this as well. If you mother, the children's grandmother, wanted to set aside funds to help them, isn't that everyone's moral obligation to uphold?

Again sate laws do differ and you'd have to look at your state law on all of these points. If you're really getting pressure you should consult a local estate planner and ask them to confirm what your state law provides.

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