BK and childrens minor accounts

[sheilaE]

We have 3 children with savings accounts. Two are minor accounts and the other is no longer a minor acct as she is now 19. All savings were opened when they were born. My concern is: My name is on all 3 accts-do I need to remove myself from them? The balances in 2 are under $300.00, but the balance in our oldests account is close to $2000.00. She just recently got a summer job and is saving every penny to pay for her spring semester of college being we won't be able to help out.
It would just kill me to have someone come in and wipe out their savings because of us.
Has anyone dealt with this before?

[jtallerie]

SheilaE, If someone like a credit card co. or IRS has a judgement lein against you and you have a joint account with your child it will be taken. Any account for your children must be a "Custodian Account". If it is a custodial account it can't be touched. I just had my accounts levied. 2 weeks ago. I had a joint account with my 17 year old daughter, her money was levied also because it was a joint account my lawyer says that we will be able to get her money back because we can prove it's her money. She works at a part time job and is starting College in August.

Don't make the same mistake that I made! Your daughter has to open her own account!

As far as your minor children are concerned you have to make sure that they are Custodial
Accounts, or the money will be taken if these accounts are just listed as joint accounts. You most likely would be able to get back that money, if you could prove that the money does not belong to you. But why put yourself through the aggrivation, if you can avoid it.

Your daughter needs to go to the bank and open a new account. If her account is a checking or savings account joint with you and she is not a minor, her money will be gone and you will not be able to get it back!

[sheilaE]

Thank you for your response! Wow, it's upsetting because the small amount my kids have is mostly from grandparents sending b-day money
I went to the bank this morning and had my name removed from my 19 yr old daughters account, so now I'm not on it anywhere. Is that good enough or should she open up a whole new account?
I guess now I need to go back and change the other two to custodial accounts.
So glad I found all this out now to save me the headache later.

[Blueboy]

We were told by our attorney that simply removing our name will not protect our childs account. We took the kids to the bank and opened an account in their name only, at a different bank and they were protected.

[sheilaE]

Can you tell me what kind of time frame this could happen? We are 5 months late on all cc. Just wondering if it might take awhile or if they could do it tomorrow. Also, would they try our accounts first before going to the kids accounts or is a free for all and they can take everything penny we have out there?

[jtallerie]

A young childs money should be in a costodial account, not in an account with just the childs name on it in my opinion. I am not sure if a parent would be able to take any money out of the account in an emergency.

You never know what life can bring! If your children needed money for illness or what ever you might not have a choice but to take money out of the account. It's better to be able to take money out if you were completely broke and could not buy your child medicine.

You should check with an atty. b/c laws might vary in different states.

When I called Chase about my childs account being levied, they told me that the money should have been put in a custodial account like my daughters other account. The money in the custodial account could not be touched.

[JackFrostMI]

I'm in the process of moving my kids accounts to another credit union (as I was joint at our current bank & we are closing those accounts). Wondering if I need to have an account at the bank to be listed as a custodial on their accounts?? What is the age limit for custodial accounts? My son is 18 - should I be custodial on his account??

I've never heard of this until I saw this thread - I've always been told by the banks that it needed to be a joint account.

[Flamingo]

It doesn't matter if the account is a custodial account (i.e., xxxx for the benefit of (minor)), or joint, if your name is on the account you have access to withdraw the money. Those funds are considered assets. Now if the accounts were held for your children by an in-law or other relative in their name for the benefit of the children, there is no issue.

[sheilaE]

Thanks Flamingo-now what about if I remove my name from my 19 yr old daughters account. Would it be safe? The funds in that account are from her current job.

[geye]

Our attorney advised us to close DS's account (that had me joint on it) and move it to a new bank. He has, and I'm not on the new account (yet, at least. they said they might have to add me because he's a minor).
But now I'm wondering... will that be looked at as an attempt to hide the money? Or will we be okay because we're disclosing it? It's only a couple of hundred, but I'm so paranoid over messing up our filing over something little.

[kmbk2b]

Chase may not be able to garnish the kids' custodial accounts, but you still have to list them as assets on your BK schedules. Don't keep these accounts off your schedules -- that's hiding assets and could get you into trouble.