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  1. #1
    Join Date
    Jul 2009
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    1

    Default Money Taken from UTMA Accounts

    My question involves personal finance in the State of: indiana and michigan

    I wrote another attourney asking advice but ill share in case anyone knows anything about utmas



    ----------

    First off I'm having issues finding anyone knowelgable in utma acts, I
    strongly feel as if I could go to court and do a better job than the
    attourneys I've spoke with. The issue we are having seems uncommon.

    Digging right into it:
    In 2000 2 utma funds were setup by my wife's grandma in the amount of
    $40,000. These lost $24,000 in value since these monies were in global
    investment and small cap funds. Sometime between 2000-2002 an additional
    account was setup with at least $13,000. Finally in 2002 an account was
    setup in the amount of $6,000.

    Accounts number one was moved to 3 different lower risk accounts in 2001
    after loosing value.

    In 2003 all 4 accounts were closed totaling over $20,000 with account number
    3 in the sum of $6,000 was untouched. My wife was 14 years old and did not
    receive any money.

    In 2006 the custodian gave $3,495 out of the remaining fund to her for
    cosomotology school. Over $13,000 was spent in her benifit with only $3,495
    being removed from the account. The custodian bought her a car and other
    necessary expenses covered. The custodian claimed she could not have the
    funds to age 25 and refused to release any information regarding any
    accounts, also that there was only $6,000 left due to "losses in the
    market".

    When my wife turned 18 she requested funds because we were homeless, denied.
    She is now 20 and the custodian refuses to hand over the account claiming
    she can't have it till age 25. There is no age for custodianship to
    terminate placed on any of the accounts at any time. We reside in Indiana
    and the accounts were concieved in michigan.

    Our assumption is that the custodian advoided taxes by abusing the
    benificary's tax id by using UTMAs. The custodian is of age that she is
    likely to pass by the benificary is 25. The money being placed into high
    risk accounts also support this, a big return for the custodian.

    I see many breaches of indiana and michigan utma acts including the gift
    being revoked 7 times! The laws state that the acts apply if the custodian,
    trust property, transferor, or benificary resides in that state during
    conception. Which acts apply and where can we enforce them? Did the
    custodian revoke the gifts?

    We can't even file my wife's taxes because a 1099 was never released, big
    problems for us. The company refuses to cooperate without a court order even
    though no age for custodianship to terminate and the custodian is
    unrechable.

    We wish to sue. My wife's rights were voliated and irreversable damage to
    her taxid was peformed. We want full amounts of all gifts revoked plus
    intrest and any and all damages.

    Over 20 lawyers we have contacted fail to possess knoweldge of utma acts.
    They mistakenly think it is a trust. All accounts are in fact utmas and it
    clearly states in all past 1099s and the master transaction transcripts we
    possess. We are going to purchase all tax transcripts from the irs to get a
    better insight and to serve as proof on these issues.

    We can pay out of this remaining utma when we secure it (as she has a legal
    right to these funds) and we wish to hire you as our attourney or receive
    recommendation on how to proceed.

    We feel a certified letter demanding accounting and transfer of accounts to
    minor will serve ample proof of the custodian refusing to comply, another
    two infractions to utma acts. As it stands we have proof of accounts being
    set up and revoked.

    All of these accounts are under the benificary's tax id and name. I would
    not waste your time if these were not utma accounts. There is no seperate
    tax id for any account.

    Thank you

  2. #2
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    Sep 2005
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    Default Re: Money Taken from UTMA Accounts

    Quote Quoting zorobyte
    View Post
    I see many breaches of indiana and michigan utma acts including the gift being revoked 7 times!
    Whatever that's supposed to mean.
    Quote Quoting zorobyte
    The laws state that the acts apply if the custodian, trust property, transferor, or benificary resides in that state during conception. Which acts apply and where can we enforce them? Did the custodian revoke the gifts?
    The laws that apply are the laws of the state with jurisdiction, as described in the statutes you (sort of) quoted.
    Quote Quoting zorobyte
    We can't even file my wife's taxes because a 1099 was never released, big problems for us. The company refuses to cooperate without a court order even though no age for custodianship to terminate and the custodian is unrechable.
    If the matter is in court, and courts are issuing orders, why are you asking us where litigation should occur? In any event, whatever "the company" is, if a court has ordered it to produce documents and it has not done so, initiate contempt proceedings or similar proceedings to compel production of the document.
    Quote Quoting zorobyte
    We wish to sue.
    How did this matter end up in court with courts issuing orders, if you haven't sued?
    Quote Quoting zorobyte
    Over 20 lawyers we have contacted fail to possess knoweldge of utma acts.
    They mistakenly think it is a trust.
    Maybe that's because they're vastly more knowledgeable about UTMA issues than you are. An UTMA account is a statutory trust. If in fact your wife is the beneficiary of an UTMA account, once she reaches the statutory age she can withdraw the funds. Are you telling us that she's twenty, won't receive the funds until she's 21, and just can't stand the wait?
    Quote Quoting zorobyte
    We can pay out of this remaining utma when we secure it (as she has a legal right to these funds) and we wish to hire you as our attourney or receive recommendation on how to proceed.
    This is a forum where you get free answers to legal questions, not an attorney.

  3. #3
    Join Date
    Jan 2006
    Posts
    38,727

    Default Re: Money Taken from UTMA Accounts

    So, did you magically find the documents that created the UTMA in Michigan?

    All accounts are in fact utmas and it
    clearly states in all past 1099s and the master transaction transcripts we
    possess.
    master transaction transcripts?

    How about that little form that Michigan requires to create an UTMA? Have that yet?

  4. #4
    Join Date
    Mar 2009
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    LA LA Land
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    Default Re: Money Taken from UTMA Accounts

    Quote Quoting zorobyte
    View Post
    In 2006 the custodian gave $3,495 out of the remaining fund to her for cosomotology school. Over $13,000 was spent in her benifit with only $3,495 being removed from the account.
    So the custodian ONLY took out $3495 out of the account(s) and yet your wife received a total of $13,000??? That to me says that the custodian handed your wife a total of over $9505 out of their own pocket. If I'm understanding that correctly, it sounds to me like someone is biting the hand that feeds them!

    Quote Quoting zorobyte
    View Post
    Our assumption is that the custodian advoided taxes by abusing the benificary's tax id by using UTMAs.
    UTMA's taxation gets pretty complicated in that part of any gains/losses are taxed at the beneficiary's tax rate up to a certain amount and the rest is taxed at the custodians tax rate. Those amounts change year after year but you can rest assured that the custodian is ultimately held responsible by the IRS for any unjustified deductions or any unreported income. Without you providing any details as to what income/loss those accounts had in them every year, you “assumption” is unjustified.

    Quote Quoting zorobyte
    View Post
    Which acts apply and where can we enforce them?
    UTMA transfers are dictated by state laws in the state they were opened. Those vary by state. I can tell you that in Indiana, the age that the typical UTMA account terminates (where the beneficiary can request transfer into their own account) when she is 21 years old. In Michigan, the UTMA terminates when the beneficiary reaches the age of 18. However, some states have different provisions that allow the donor or the custodian to extend the age of termination at the time the gift/transfer is made. That seems to fit within what the custodian has told you in this case.... That the account was set up to terminate at age 25. Whether those provisions are in fact an option in the state where this account was opened, I couldn't tell you. Any qualified CPA or Financial Advisor who is licensed in that state can answer that definitively.

    Quote Quoting zorobyte
    View Post
    The money being placed into high risk accounts also support this, a big return for the custodian.
    How could it be a “big return for the custodian” when you yourself have stated a number of times that the accounts were losing value year after year?

    Quote Quoting zorobyte
    View Post
    I see many breaches of indiana and michigan utma acts including the gift being revoked 7 times! The laws state that the acts apply if the custodian, trust property, transferor, or benificiary resides in that state during conception. Which acts apply and where can we enforce them? Did the custodian revoke the gifts?
    What you might be unaware of is that a custodian for an UTMA account has the ability to make investment decisions, transfer money between accounts (in the name of the beneficiary), close one or multiple accounts, open multiple accounts, withdraw funds or make additional deposits so long as they are named as custodian. That is the nature of UTMA accounts; that's they way they are set up and the way they operate... So what you might be viewing as “breaches” are in fact transactions that the custodian is authorized to make whether the beneficiary (who until the reach the age when they can claim the account as their own) likes it or not.

    Quote Quoting zorobyte
    View Post
    We wish to sue. My wife's rights were voliated and irreversable damage to her taxid was peformed. We want full amounts of all gifts revoked plus intrest and any and all damages.
    You mean you want to sue the custodian for the full original amounts that were initially invested in each account? Good luck with that... Just keep in mind that when an account is invested in the stock market, the typical investment vehicle for UTMA accounts, there are no guarantees of a gain. Considering the fact that the market has been a big brown scary polar bear since early 2000 (when these accounts were originally were opened), you'd be hard pressed in proving that the custodian knowingly made investment decision that worked to the detriment of the monies invested in such accounts.

    Perfect proof of this is the fact that no attorney has opted to take your case. Also, you have to understand that attorney work by the hour. So the $6000 or so that your promising payment out of, might only be sufficient to get the ball rolling in a case like yours. So why would any attorney take your case knowing full well that they aren't going to get fully compensated for the time they will have to put in to see your case to a final resolution???

    Lastly, and since you have not mentioned who this custodian is, or what relation they have to your wife, have you ever considered that he/she might be refusing to cooperate based on the fact that YOU are the one who is seemingly leading the charge in this battle of yours??? Part of the fiduciary duty that a custodian takes on by assuming their role, is to look out for the best interest of the beneficiary... Not who she marries 6 or more years after the accounts are set up. Far be it for me to suggest that you are not liked by the custodian, but in-laws do get weird like that sometimes.

  5. #5
    Join Date
    Jan 2006
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    38,727

    Default Re: Money Taken from UTMA Accounts

    That guy;

    michigan requires, by statute, an UTMA be created in a particular fashion. It is quite simple but it still requires a document stating the UTMA is being created, who the custodian is, and who the minor is.

    OP has stated on another forum there are no such documents, therefore, there is no UTMA.

    That seems to fit within what the custodian has told you in this case.... That the account was set up to terminate at age 25.
    Michigan allows up to 21 but it must be stated in the documents that create the UTMA, therefore, no documents, no 21; but greater than that, no UTMA.

    OP is on a wild goose chase and either does not understand the situation or is just trolling.

  6. #6
    Join Date
    Apr 2009
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    757

    Default Re: Money Taken from UTMA Accounts

    Quote Quoting jk
    View Post
    That guy;

    michigan requires, by statute, an UTMA be created in a particular fashion. It is quite simple but it still requires a document stating the UTMA is being created, who the custodian is, and who the minor is.
    jk - I think that you are reading too much into the statute. It does say "substantailly." And the form in Section 14 only applies to two of the subsections in Section 13. Creating an UTMA at a financial institution is usually just a matter of an additional checkbox and providing two names instead of one on an account registration form.

    And how the OP knows whether am account registration form does or does not exist is beyond me.


    OP is on a wild goose chase and either does not understand the situation or is just trolling.
    At first, I thought wild goose chase. Now, since the tale seems to grow with the telling, I vote for troll

  7. #7
    Join Date
    Jan 2006
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    Default Re: Money Taken from UTMA Accounts

    =harrylime;334813]jk - I think that you are reading too much into the statute. It does say "substantailly." And the form in Section 14 only applies to two of the subsections in Section 13. Creating an UTMA at a financial institution is usually just a matter of an additional checkbox and providing two names instead of one on an account registration form.
    /

    ok show me:

    554.533 Creation and transfer of custodial property; actions.
    Sec. 13.

    (1) Custodial property is created and a transfer is made whenever an action described in subsections (2) to (8) is taken.

    (2) A certificated or uncertificated security in registered form is either of the following:

    (a) Registered in the name of the transferor, an adult other than the transferor, or a trust company, followed in substance by the words: “as custodian for ____________________ (name of minor) under the Michigan uniform transfers to minors act”.

    (b) Delivered if in certificated form, or any document necessary for the transfer of an uncertificated security is delivered, together with any necessary endorsement to an adult other than the transferor or to a trust company as custodian, accompanied by an instrument in substantially the form set forth in section 14.

    (3) Money is paid or delivered to a broker or financial institution for credit to an account in the name of the transferor, an adult other than the transferor, or a trust company, followed in substance by the words: “as custodian for ____________________ (name of minor) under the Michigan uniform transfers to minors act”.

    (4) The ownership of a life or endowment insurance policy or annuity contract is either of the following:

    (a) Registered with the issuer in the name of the transferor, an adult other than the transferor, or a trust company, followed in substance by the words: “as custodian for ____________________ (name of minor) under the Michigan uniform transfers to minors act”.

    (b) Assigned in a writing delivered to an adult other than the transferor or to a trust company whose name in the assignment is followed in substance by the words: “as custodian for ____________________ (name of minor) under the Michigan uniform transfers to minors act”.

    (5) An irrevocable exercise of a power of appointment or an irrevocable present right to future payment under a contract is the subject of a written notification delivered to the payor, issuer, or other obligor that the right is transferred to the transferor, an adult other than the transferor, or a trust company, whose name in the notification is followed in substance by the words: “as custodian for ____________________ (name of minor) under the Michigan uniform transfers to minors act”.

    (6) An interest in real property is recorded in the name of the transferor, an adult other than the transferor, or a trust company, followed in substance by the words: “as custodian for ____________________ (name of minor) under the Michigan uniform transfers to minors act”.

    (7) A certificate of title issued by a department or agency of a state or of the United States that evidences title to tangible personal property is either of the following:

    (a) Issued in the name of the transferor, an adult other than the transferor, or a trust company, followed in substance by the words: “as custodian for ____________________ (name of minor) under the Michigan uniform transfers to minors act”.

    (b) Delivered to an adult other than the transferor or to a trust company, endorsed to that person followed in substance by the words: “as custodian for ____________________ (name of minor) under the Michigan uniform transfers to minors act”.

    (8) An interest in any property not described in subsections (2) to (7) is transferred to an adult other than the transferor or to a trust company by a written instrument in substantially the form set forth in section 14.
    Quote:
    554.534 Instrument; form.
    Sec. 14.

    An instrument in substantially the following form satisfies the requirements of section 13(2)(b) and 13(8):

    “TRANSFER UNDER THE MICHIGAN UNIFORM TRANSFERS TO MINORS ACT

    I, ____________________ (name of transferor or name and representative capacity, if a fiduciary) transfer to ____________________ (name of custodian), as custodian for ____________________ (name of minor) under the Michigan uniform transfers to minors act, the following:

    (insert a description of the custodial property sufficient to identify it).

    Dated: _______________

    __________________________________________________

    (Signature)

    ____________________ (name of custodian) acknowledges receipt of the property described above as custodian for the minor named above under the Michigan uniform transfers to minors act.

    Dated: _______________

    _________________________________________”

    (Signature of Custodian)
    everything I see in there states that:

    1. the words "“
    as custodian for ____________________ (name of minor) under the Michigan uniform transfers to minors act”.
    must be included or;

    2. where that is not required, the form in section 14 is required and/or;

    3. the names of the transforer, the custodian, and the minor all must be included with their position regarding this transaction be included.

    as to "substantially"; that is regarding the specific wording of the document shown in #14. Did I say it had to be exact? I don't think so. I said such a document is required. Obviously, since some sections of the previous section do not require use of such a form, obviously, it would not be required and may not be present if those sections were utilized to transfer the property. In those sections that do not require that document, there is specific verbiage required (i.e. a document) required to show the creation of the UTMA.

    So, you see, there is a document creating the UTMA in EVERY case. It specifically notes that the instrument created is an UTMA. It specifically names 1. the transforer, 2. the custodian, 3. the minor.

    Creating an UTMA at a financial institution is usually just a matter of an additional checkbox and providing two names instead of one on an account registration form.
    Did I EVER say it took more than this? Yes I did and I am correct in saying so. In fact, here is what I said:

    It is quite simple but it still requires a document stating the UTMA is being created, who the custodian is, and who the minor is.
    So, are you stating that the account registration form listing the 3 parties (not two as you mentioned) involved and having the specific verbiage required that states it is an UTMA per the Michigan statutes is not a document?

    HHmm, I learn something new every day.



    And how the OP knows whether am account registration form does or does not exist is beyond me.
    he stated there is no such document. How he knows is irrelevent, to me. He is married to the bene of the supposed UTMA so I would suggest she does have access to said document and OP is merely repeating her knowledge of the subject.


    so, to continue with that line;

    if she has access to said document (which OP stated specifically does not exist), she would also know if the termination age has been extended. If it hasn't, it is 18 and the bene needs to take action to take possession of the account. If it is extended, bene will simply have to wait until that age is reached, which is 21 at the extreme in Michigan, to seek possession of the account.


    as to troll or loon?

    I think it is a loon that simply believes he has struck a goldmine via his wife.

    He is wrong.

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