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#36447 - 04/18/06 06:20 PM Ex Husband cashed the kids UTMA accounts
regan94 Offline
Junior Member

Registered: 04/18/06
Posts: 1
Loc: Wayne, PA, United States
My ex-husband cashed out my childrens college funds. He was the custodian on these accounts but pocketed the money. Can anyone help me with what to do from here. Thank you

#36448 - 04/18/06 10:59 PM Re: Ex Husband cashed the kids UTMA accounts
cdwood Offline

Registered: 02/12/06
Posts: 15
Loc: Jenks, OK USA
Before calling an attorney, I'd direct the ex to the site. The both of you should click on the "Kids/college" tab, then click on "Custodial accounts for minors," then click on "The Minor's right to the money." Read.

Perhaps your ex has ice water in his veins and feels he can gladhandedly waltz off with the money without consequences. Perhaps. But there are a raft of tax, embezzlement, and criminal ramifications he might want to reflect upon.

#36449 - 04/19/06 12:30 AM Re: Ex Husband cashed the kids UTMA accounts
anonymous Offline

Registered: 03/29/05
Posts: 2109
Actually, if he is smart, he probably can waltz away with this money pretty easily.

UTMA money can be used for anything that benefits the child. Example: The children spent the weekend at his house. Your ex bought groceries to feed them, bought them a basketball and a tennis racket and took them to dinner and a movie. He bought gas for his car to drive them around. He could raid their UTMA to pay for all of this.

In other words, as long as he keeps receipts and actually spends money on his children, he can legally raid the accounts.

[This message has been edited by anonymous (edited April 19, 2006).]

#36450 - 04/19/06 07:53 AM Re: Ex Husband cashed the kids UTMA accounts
ParrRemedy Offline

Registered: 04/26/05
Posts: 1163
When you say EX pocketed college funds what funds do you mean--UTMA, 529 ,CESA, Trust etc --?

You use the word custodian--which suggests a UTMA or CESA ? The owner of a 529 is free by law to reverse the gift, its a very clear concept--perhaps not what you wanted to hear. Its the owners right!

From the Fairmark site, it would suggest that to convert the UTMA funds so as to meet any support obligation is no illegal . "A custodial account under the Uniform Transfers to Minors Act can be used to pay expenditures for the benefit of the child. It's frequently said, incorrectly, that the expenditures cannot be for something that is included in a parent's support obligation. The Uniform Act plainly says exactly the opposite:

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."

So if Dad can show the funds went to kids use he may be OK.

If he merely pocketed the funds he may be on wrong side of law--but I gather this area of law is not full of enforcement resources at all.

Look up your state's UTMA--it most likley has a clause wherein the child can demand an accounting from the custodian. Child or his guardian would have right to proceed against custodian for improper conversion.

(His kids or your kids ?)

#36451 - 04/19/06 08:56 AM Re: Ex Husband cashed the kids UTMA accounts
ParrRemedy Offline

Registered: 04/26/05
Posts: 1163
Sorry, yes you did say it was UTMA.

While this may be a crime for the custodian to pocket the funds-if that is indeed the case, I doubt your local DA will jump to get involved--unless it helps with his next election. He or she will probably suggest you need to go the private enforcement route.


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