The age at which an UTMA custodianship terminates depends on how the custodianship was created. 760 ILCS 20/21. In general, an UTMA deposit account created by gifting money to a minor will terminate at age 21. However, there are some circumstances in which other types of UTMA custodianships will terminate at age 18. The details of the rules that determine when a custodianship will terminate are below.

UTMA custodianships created under Section 5 or Section 6 of the Act terminate when a minor turns 21.

• An UTMA custodianship created under Section 5 of the Act terminates when the minor turns 21. These custodianships are created by gifting property to a minor or by exercising a power of appointment to transfer property to a minor.
• An UTMA custodianship created under Section 6 of the Act terminates when the minor turns 21. These custodianships are created by a fiduciary acting under a will, trust, or other governing instrument that permits or requires the fiduciary to transfer property to the minor.

However, UTMA custodianships created under Section 7 or Section 8 of the Act instead terminate when the minor turns 18 (the age of majority in Illinois). Both of these types of custodianships terminate early because they are substitutes for conservatorships, which would have terminated at age 18 under Illinois law.

• An UTMA custodianship created under Section 7 of the Act terminates when the minor turns 18. These custodianships are created by a fiduciary acting under a will, trust, or other governing instrument that expressly prohibits the use of an UTMA custodianship or that is inconsistent with an UTMA custodianship.
• An UTMA custodianship created under Section 8 of the Act terminates when the minor turns 18. These custodianships are created by a person who holds a minor’s property (such as a bank transferring funds in a payable-on-death (POD) deposit account to a minor) or who owes a debt to a minor (such as a party against whom a minor has a court claim or judgment).

Once a custodianship has terminated, the Act places the duty of closing out the UTMA account on the custodian, who “shall transfer in an appropriate manner the custodial property (to the extent that it has not been used pursuant to this Act) to the minor or to the minor’s estate.” 760 ILCS 20/21. If a custodian fails to act when the custodianship terminates, and the former minor requests access to the UTMA account, the bank may wish to contact a custodian and inform him or her of this obligation. We would not recommend that the bank unilaterally provide the former minor with direct access to the account, since it is still a custodial account.

If the custodian dies before the minor comes of age, the Act will determine who should serve as a successor custodian. If the minor is fourteen years old or older, the minor can designate the successor custodian. If the minor is under fourteen, the successor custodian would be the minor’s guardian. 760 ILCS 20/19.

Also, note that under Section 45.1 of the Illinois Banking Act, the same rules and regulations that apply to an account held by an adult apply to an account held by a minor. 205 ILCS 5/45.1. That states that a bank may “accept deposits made by a minor and may open an account in the name of such minor and the rules and regulations of such bank with respect to each such deposit and account shall be as binding upon such minor as if such minor were of full age and legal capacity.”