Non-Tax Questions and Comments
Questions or comments about our forum software or this web site in general.
Transferring UTMA stock to custodian
Posted by: adina, May 27, 2016 06:58PM
My son is on the autism spectrum and we would like him to apply to DDA and SSI. He has some custodial stocks given to him many years ago by his grandparents, and I have been told that since he is over 18 he may begin contributing towards household expenses as well as paying for items like summer camp, etc. And I have paid for his summer camp with a credit card and have asked that an UTMA stock in a brokerage account, for which I am the custodian, be turned over to my ownership. This would be to reimburse us for the summer camp expenditure as well as some other expenses. The brokerage house is telling me that I could sell the stock but I cannot own it; that it would be illegal to turn it over to me, even though I was not the one who made the gift. They are saying UTMA stocks are irrevocable, and that it doesn't only mean it can't go back to the donor, but it can't go to the custodian, either.

Are they right? Do I not have the power to transfer this stock to myself to reimburse myself? Why would it be legal to sell the stock and reimburse myself from the proceeds yet illegal to transfer the stock to myself?

Re: Transferring UTMA stock to custodian
Posted by: Art, May 27, 2016 08:57PM
Is there a legal guardianship of his funds established and approved by a court? If not you might wish to discuss this with an attorney.

True, the UTMA assets belong to him and I would seek legal advice before proceeding further.

Re: Transferring UTMA stock to custodian
Posted by: Drewremedy, May 30, 2016 02:19AM
The assets belong to him.....he is entitled to spend them or gift them...and reimburse you as he sees fit for things expended on his behalf... .
But it is problematic for you to convert them to you name

In theory you need to turn the account over to him.

If he is incapable of managing his affairs..discuss with counsel the steps to get named his guardian...

I get it that he may need to spend away much of his counted assets To qualify for some public sector programs ...I don't think he can put his own funds in a special needs trust to get them out of count....but double check..

Re: Transferring UTMA stock to custodian
Posted by: Drewremedy, September 28, 2016 05:06PM
BE careful, (1) as custodian you are supposed to turn the assets over to young adult at the age set forth in your state

(2) probably OK to reimburse yourself for expenditures made on his behalf for his benefit ....but use some common sense and docuement it well ..be sure it passes the smell test .

(3) I have no doubt that for modest sums the custodian can deliver the funds and then hold his or her breath while young adult spends down the funds to qualify for means tested benefits ....but watch the smell test .




Sorry, only registered users may post in this forum.