We offer two savings accounts that function in the same way; one is an Illinois Uniform Transfers to Minors Act (UTMA) account and the other is a minor savings account. If we mistakenly opened an Illinois UTMA account as a minor account, or vice versa, should we provide new disclosures before correcting the account names in our system? Also, would the escheatment rules for savings accounts apply, or the escheatment rules for UTMA accounts, when the title of the account doesn’t accurately describe the account — for example, if the title on an account reads “as Custodian Under ILUTMA,” but the ownership was incorrectly listed as “joint”?

We recommend providing new account disclosures when changing an account name to add or remove a reference to the Illinois UTMA. A reference to the Illinois UTMA in an account name implies that the account is a custodial account subject to the Illinois UTMA’s requirements for custodians, rather than a savings account that is owned by the minor (whether jointly or not) and does not necessarily involve a custodian. While your disclosures do not need to detail the obligations that apply to an UTMA account custodian, we believe that your bank should alert account owners when redesignating an account to add or remove the UTMA reference in the account title.

Additionally, we are not aware of any Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) provisions that address when the title of an abandoned account does not match other account records. Consequently, we recommend establishing a consistent process to determine whether your bank will treat an account as an Illinois UTMA account or ordinary savings account for purposes of reporting unclaimed property to the State Treasurer. For example, it might be advisable to follow the account titles — i.e., treating any account with an UTMA reference in the title as subject to the presumed abandonment period for UTMA accounts (generally three years after the minor reaches the age of majority, which could be 18 or 21 depending on how the UTMA account was funded) — rather than following alternative account descriptions found elsewhere in your systems.

For resources related to our guidance, please see:

Illinois Uniform Transfers to Minors Act, 760 ILCS 20/15 (“Use of Custodial Property. (a) A custodian may deliver or pay to the minor or expend for the minor’s benefit so much of the custodial property as the custodian considers advisable for the use and benefit of the minor, without court order and without regard to (i) the duty or ability of the custodian personally or of any other person to support the minor, or (ii) any other income or property of the minor which may be applicable or available for that purpose.”)

Regulation DD, 12 CFR 1030.5(a)(1) (“A depository institution shall give advance notice to affected consumers of any change in a term required to be disclosed under § 1030.4(b) of this part if the change may reduce the annual percentage yield or adversely affect the consumer. The notice shall include the effective date of the change. The notice shall be mailed or delivered at least 30 calendar days before the effective date of the change.”)

Regulation DD, 12 CFR 1030.4(b) (“Account disclosures shall include the following, as applicable: (1) Rate information . . . (2) Compounding and crediting . . . (3) Balance information . . . (4) Fees . . . (5) Transaction limitations . . . (6) Features of time accounts . . . (7) Bonuses . . .”)

Illinois RUUPA, 765 ILCS 1026/15-201 (“When property presumed abandoned. Subject to Section 15-210, the following property is presumed abandoned if it is unclaimed by the apparent owner during the period specified below: . . . (6) a demand, savings, or time deposit, 3 years after the later of maturity or the date of the last indication of interest in the property by the apparent owner, except for a deposit that is automatically renewable, 3 years after its initial date of maturity unless the apparent owner consented in a record on file with the holder to renewal at or about the time of the renewal; . . .”)

Illinois RUUPA, 765 ILCS 1026/15-204(a) (“Subject to Section 15-210, property held in an account established under a state’s Uniform Gifts to Minors Act or Uniform Transfers to Minors Act is presumed abandoned if it is unclaimed by or on behalf of the minor on whose behalf the account was opened 3 years after the later of:

(1) except as in subparagraph (2), the date a communication sent by the holder by first-class United States mail to the custodian of the minor on whose behalf the account was opened is returned undelivered to the holder by the United States Postal Service;

(2) if a communication is re-sent within 30 days after the date the first communication is returned undelivered, the date the second communication was returned undelivered; or

(3) the date on which the custodian is required to transfer the property to the minor or the minor’s estate in accordance with the Uniform Gifts to Minors Act or Uniform Transfers to Minors Act of the state in which the account was opened.”)