We believe you should require the custodian of the UTMA account to endorse the check before cashing it. In addition, you should contact and remind the custodian that the custodian now has an affirmative duty under the UTMA to transfer the account to its beneficiary, since he or she has reached the requisite age or event (in this case, having become 21) for obtaining the property in the account.

A custodian of an UTMA account is not the beneficiary’s representative; rather, he or she is a person designated under the UTMA to perform certain custodial duties defined by the Act. One of those custodial duties is to close the UTMA account and transfer the account to the minor when the UTMA beneficiary reaches the age of either 21 or 18 (depending on the type of transfer), or when the beneficiary dies, if earlier. See 760 ILCS 20/21 (The custodian “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 upon the earlier of” reaching 21 or 18 (as applicable) “or the minor’s death”) (emphasis added). 

Until such time as the account is closed, however, it remains a custodial account, and only the custodian has signature authority for this account. A check made payable to the account with the custodian as the payee should not be cashed without the custodian’s endorsement.  Under the Uniform Commercial Code, a payor bank should refuse to pay a check unless it is “properly payable,” meaning that it was “authorized” by the drawer of the check. 810 ILCS 5/4-401. Here, the issuer of the check has authorized payment to the custodian of the account (albeit on behalf of the account), not to the account’s beneficiary. As a result, the beneficiary’s endorsement on the check likely would not be considered effective under the UCC.