Illinois law requires UTMA accounts held by a financial institution to be designated in the name of the person establishing the account, followed by the words “as a custodian for  ………….. (name of minor) under the Illinois Uniform Transfers to Minors Act.” Since the accounts in question are not correctly titled, we believe you should correct them to reflect this requirement.

We are unaware of any specific guidelines for correcting UTMA account titling errors. In our view, you can unilaterally change the account titles and do not need to create new accounts or obtain new signatures from the affected account owners, provided your records reflect continuity between the newly titled accounts and the originally titled accounts. However, if you take this approach, we recommend providing notice of the account title change to the affected customers, which should include contact information in case they have any questions, concerns or objections. If you do receive an objection from an account owner for whatever reason, we would recommend that you offer to convert the account into a new (properly titled) account for your customer.

For resources related to our guidance, please see:

• Illinois Uniform Transfers to Minors Act, 760 ILCS 20/10(a)(2) (“Sec. 10. Manner of Creating Custodial Property and Effecting Transfer; Designation of Initial Custodian; Control. (a) Custodial property is created and a transfer is made whenever: . . . (2) money is paid or delivered to a broker or financial institution for credit to an account in the name of the transferor, an adult other than the transferor, or a trust company, followed in substance by the words: ‘as custodian for …………… (name of minor) under the Illinois Uniform Transfers to Minors Act . . . .’”)