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We have a custodial account for which the beneficiary was a minor but now is well over the age of majority. Our attempts to reach the custodian, who lives in a foreign country, have been unsuccessful. Should we transfer the account to the beneficiary without the custodian’s consent? – IBA Compliance Connection

IBA Compliance Connection

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We have a custodial account for which the beneficiary was a minor but now is well over the age of majority. Our attempts to reach the custodian, who lives in a foreign country, have been unsuccessful. Should we transfer the account to the beneficiary without the custodian’s consent?

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The answer to your question likely will depend on the provisions in your account agreement.

If the account is covered by the Uniform Transfers to Minors Act (UTMA), the title of the account should state the custodian’s name, with the designation “as custodian for ……… (name of minor) under the Illinois Uniform Transfers to Minors Act.” If that is the case, we recommend that you do not permit the former minor to access the account. While the UTMA requires the custodian to transfer the account when the beneficiary reaches the age of majority, it does not provide the beneficiary with automatic access to the account on reaching the age of majority.

If the account is not an UTMA account, as evidenced by an account title that does not reference the UTMA, you should look to the account agreement to determine the beneficiary’s rights for accessing the account after reaching the age of majority.

For resources related to our guidance, please see:

  • UTMA, 760 ILCS 20/21(a) (“The custodian shall transfer in an appropriate manner the custodial property . . . to the minor or to the minor’s estate” once the minor reaches the age of majority.)