Children's Bank Accounts

[helpmeout]

Did do a search and I think that I will be okay in not listing my kids' bank accounts. I don't even control them, my ex does.

My issue is when my ex changed jobs, he had to move them out of the credit union that he was in (could only get into the bank if he was an employee). He chose to put them in the bank that I bank at. My name or social is not on there at all. This is the bank that holds my mortgage. I can't afford the mortgage so I am letting the house go.

I did tell my ex to move the accounts to his bank, but didn't tell him the reason. Eventually I will have to tell him about the bankruptcy as the kids and I will be moving and he has a right to know where the kids will be living.

Will my bank go after those accounts if my ex didn't listen to me? I don't want to ask my bank that as I am not ready to file yet and do need to make the mortgage payment in the month that I file and I don't want them to refuse to accept the payment. I don't think that I have to list them on my paperwork as I am not on the accounts and don't have the account numbers anyway.

[whipster1]

They belong to your kids. Only if your are on the account should they be listed. If the bank is Wells Fargo move them today.

[CaptTroll]

If your name is not on the account i would think it should not be an issue, since you do not have transaction authority. Is your Ex on the mortgage? I'd think thats where a issue may come up if the accounts are at the same bank.

[aljohnson007]

I thought I had moved everything from BofA but forgot my wife was still listed as a co-owner of our daughters account which was opened when she was still a minor. When the mortgage became overdue, they deducted the payment from the daughters account and stated "transfer from related account." Best to make certain you are not related to any account with your bank. Merry Christmas.

[Flamingo]

Savings accounts for minor children are custodial accounts (i.e., xxxx for the benefit of "name of minor child"). Custodial accounts while held for minor children are accounts that the custodian has access to and, therefore, the amount is considered an asset to that person. If your name is not on that account as the custodian, you should not have to list it. But, as always, check with your attorney.

[helpmeout]

If your name is not on the account i would think it should not be an issue, since you do not have transaction authority. Is your Ex on the mortgage? I'd think thats where a issue may come up if the accounts are at the same bank.

I refinanced everything out of his name over 2 1/2 years ago.

They are at the bank that holds my mortgage, but my name has never been on the account. I do not have access to it at all. Not even as the custodial parent. My ex is the one who controls the accounts and has since before the divorce.

[DebtHater]

Custodial accounts while held for minor children are accounts that the custodian has access to and, therefore, the amount is considered an asset to that person. If your name is not on that account as the custodian, you should not have to list it. But, as always, check with your attorney.

According to my attorney it's the opposite. We have two custodian accounts for the children and my wife is listed on both. The attorney said it is not necessary to list as it is not our money, it's the kids money. The custodian only has access to it, not rights to it.

Our attorney compared it to an escrow account with banks where you pay give the bank money to hold in escrow to be distributed later. Just because the bank has it and has access to it does not make it theirs and is not considered an asset of theirs.

[Flamingo]

If your name is on your minor child's custodial account, you have access to those funds and our attorney advised us they are an asset since in all reality you also claim your minor child as a dependent. However, since the amount in the one we had was small, it was not a real issue. Thousands of dollars might be an issue. If the custodial account is in the name of your father in law or other relative for the benefit of your minor child, that is not an asset for you as you have no access to those funds.

I understand your attorney's comparison but a bank is a corporation and under law cannot utilize or disburse any funds it holds in escrow for any reason without the owner's consent in writing. Parents holding savings accounts for their minor, dependent children is a completely different situation as they can walk right into the bank where the money is held and withdraw it.

As always, advice is different when it comes to attorneys and various districts so always go by what your attorney advises you as he/she will be representing you and will know your finances, situation, etc. in case an issue comes up as to any asset in your filing.

[DebtHater]

If your name is on your minor child's custodial account, you have access to those funds and our attorney advised us they are an asset since in all reality you also claim your minor child as a dependent.

I did some googling and it seems that custodial accounts can be considered an asset if not set up properly. As long as the account is listed as UGMA or UTMA it is generally safe.

I'll bring this one further. My wife and I disclosed to our lawyer of a checking account she's named on for a girl scout troop she's a leader of. Again, the lawyer said it's not hers, so it's not an asset regardless if she's named on it or not. The only difference I can see between this and a custodial account is she did not have to put her SS# on the scout account as it has the districts tax ID number on it. Also the account is tied to a 501(c)(3) corp.

[MSbklawyer]

According to my attorney it's the opposite. We have two custodian accounts for the children and my wife is listed on both. The attorney said it is not necessary to list as it is not our money, it's the kids money. The custodian only has access to it, not rights to it.

Our attorney compared it to an escrow account with banks where you pay give the bank money to hold in escrow to be distributed later. Just because the bank has it and has access to it does not make it theirs and is not considered an asset of theirs.

Your attorney is right. A person or a corporation can hold money for another person. That person holding the money is usually referred to as a "trustee" or a "fiduciary" or something along those lines. While the trustee does have certain rights to the money, i.e. the right to hold on to it, he doesn't have the right to convert it to his own use. The bankruptcy trustee gets only as much interest in the money or other property as the debtor has.

So, the money being held by a parent in trust for a child does not become property of the bankruptcy estate when the parent files for bankruptcy. This assumes, as you said, that the trust account is properly set up under the UGMA and / or UTMA. If it's a lot of money, the trustee is going to probe pretty deeply to uncover whether the arrangement is simply a sham to protect the debtor's assets.

[mtbc]

Question 14 of the Statement of Financial Affairs does ask about property owned by another person that the debtor holds or controls. So I would guess that at least some of this kind of thing should probably be mentioned there even when they're not really the debtor's asset.

[MSbklawyer]

Question 14 of the Statement of Financial Affairs does ask about property owned by another person that the debtor holds or controls. So I would guess that at least some of this kind of thing should probably be mentioned there even when they're not really the debtor's asset.

Absolutely, it should be disclosed there.