We believe that some documentation is necessary to open an account under the Illinois Uniform Transfers to Minors Act (UTMA). If a person is acting as custodian of a minor’s property, they should have been nominated as custodian in writing, with the custodian’s name listed, with the words “as custodian for ……………….. (name of minor) under the Illinois Uniform Transfers to Minors Act.” 760 ILCS 20/4. Section 10 of the law shows how different types of property can be transferred to a minor under the UTMA; for example, money paid to a financial institution for should be delivered “follow in substance by the words: ‘as custodian for ……………….. (name of minor) under the Illinois Uniform Transfers to Minors Act.’” 760 ILCS 20/10(2). Other types of property have more elaborate requirements.

After opening a UTMA account, the custodian also has the responsibility to “keep custodial property separate and distinct from all other property in a manner sufficient to identify it clearly as custodian property of the minor.” This responsibility is met if the account is designated “in the name of the custodian, followed in substance by the words: ‘as a custodian for  ………….. (name of minor) under the Illinois Uniform Transfers to Minors Act.’” 760 ILCS 20/13(d).

Also note that financial institutions and other third parties who deal with UTMA custodians are not liable for the custodian’s acts, provided that your institution does not have any knowledge of invalid or inappropriate uses of the minor’s property. 760 ILCS 20/17.