Can my debt affect my kids bank accounts if l’m titled UTMA and it’s listed as custodial?

UPDATED: Dec 22, 2011

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Can my debt affect my kids bank accounts if l’m titled UTMA and it’s listed as custodial?

I have credit card and student loans that I have fell behind on. I’m scared that they will get a judgement to freeze my assets or even my kids if my name is listed as custodial.

Asked on December 22, 2011 under Bankruptcy Law, New York


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you are the custodian of your children's bank accounts under the Uniform Transfer to Minors Act (UTMA) these bank accounts are not yours. They are your childrens' so long as they are minors where you act as the trustee under these accounts for their benefit. When the children become adults, they can control the accounts.

Since you do not own these accounts, your should not be overly concerned that the creditors can obtain a judgment against you and legally levy upon these UTMA accounts. If that does happen, you need to immediately serve and file a claim of exemption on the levy stating that the accounts are UTMA accounts. The court would then make a ruling on the appropriateness of the levy.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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