Custodial Account

Maylay33
  |     |   2 posts since 2019

I have had a check sent to me that is made out to my mother and me Cust GIFT act. I am no longer a minor. Is there any way for me to cash this check?



Answers
CuriousDave
  |     |   36 posts since 2018
Probably not, based on who the named payee is.
Although her guardianship has terminated because you have reached majority age, the most practical solution, assuming you and your mother are at least on speaking terms, is to give her the check to deposit and then write you a check in the same amount. If she refuses, you will need to contact the issuer, explain your situation, and ask whether you can void the check, return it to the issuer, and have the issuer send you a new check naming you personally as payee. The issuer will probably ask you to provide proof of age for this purpose.
Maylay33
  |     |   2 posts since 2019
We went to the issuing bank and they said even with her there they would not cash the check. Issuer can not rewrite the check either. Over 10,000 dollars and we can't do anything with it!
deplorable_1
  |     |   135 posts since 2020
That's just nonsense. If you both signed the back of the check you should be good to go. In fact by law any money in a custodial account actually belongs to the child and not the custodian from the day of deposit. At least that's how the IRS looks at it. The custodian only has control of the money up to age 18-24 depending on your state laws, full time student etc.
Go to the bank that issued the check and have them issue it directly to you. They can't just take away $10,000 and say tough luck.
CuriousDave
  |     |   36 posts since 2018
Tax rules dictate who pays tax on what but do not dictate who legally owns funds in a bank account, which is a matter of federal banking law (assuming the bank in question is registered in the federal banking system).The question was not entirely clear about which state's gifts to minors act applies, and that can make a difference because as a general rule, upon the child attaining majority age the account automatically becomes owned by the child alone and the custodianship ends, but under some other state arrangements it may terminate later if that is made part of the custodianship (in Florida, for instance, it can be made to terminate at age 25 even through the child attains majority sooner).
If Malay33 can provide a notarized copy of the custodianship paperwork he/she can try taking that to the bank together with proof of ID and age as the bank may not have the original handy so it can be sure Malay33 is entitled to be paid.
MrchntDeth
  |     |   1 posts since 2016
The "advice" given by Malay33 is absolutely incorrect.

There are actually a few ways of handling this:

1. You could have your mother "endorse" the back of the check as follows:
[mom's signature], "Cust. for 'Curious Dave'"

or

2. Go to the issuing bank and ask for THIS PARTICULAR BANK'S procedures for addressing a situation such as this. I can assure that you that this is not their first, nor will it be their last time cashing the proceeds from a time-deposit check (e.g., a long-term CD) where the beneficiary (in this case "Curious Dave") has reached the age of majority, 18 in most states, 19 and 21 in one or 2 states respectively.

Assuming that Curious Dave is over the age of majority, bring your CD paperwork, one (or better yet, two) pieces of government issued ID (e.g., a drivers license, a US Passport, a Concealed Handgun License, or one of these and your birth certificate. This (and a competent bank manager) should be all that you'll need to cash in YOUR CD.

Best of luck. Please let us know what happened with your CD.

PS: your mom SHOULD NOT have been named as the Payee in this situation (i.e., where she was merely acting as your custodian during your age of minority. It SHOULD HAVE been issued and made payable to "Mom, Custodian for Curious Dave under the UTMA [insert your state's 2 letter abbreviation at the time the CD was opened]."

Upon reaching the age of majority for the state IN WHICH YOU reside, AND not laws of the state where the bank or its branch is located, the check could be negotiated by your mom over to you, as per the my instructions/suggestions in line item number 1. Or by you alone by going to the bank as per the instructions I laid out above for you at Line Item suggestion number 2.

please note that this is NOT to be construed as legal advice but rather, suggestions from one person to another, trying to help him out. The laws vary throughout the U.S. and the advice applicable to one person may be very different as it applies to your particular situation.
deplorable_1
  |     |   135 posts since 2020
I find it very difficult to believe that the bank that issued the check refuses to cash the check they issued. There has to be something else going on here like suspected fraud(check already cashed) or signatures don't match etc. Something is missing from the story. It's not like Wells Fargo and BoA refusing to cash a old CD a check has already been issued in this case.
me1004
  |     |   959 posts since 2010
Many banks will not cash checks for anyone but their customers. Some others will but only for a fee.
Choice
  |     |   186 posts since 2020
Ask the bank that issued the check “how much time has to pass for any check if not cashed to be canceled (or not honored) by the bank?” And, “”where do the funds go when a check is not cashed?” Back to the the original account should be the answer! Then ask the manager to speed up that process, hand them the check, and do it today OR I/you are going to blog the wrongful holding of funds...or something like that.
CuriousDave
  |     |   36 posts since 2018
When the custodianship ends, the child automatically becomes the sole owner of the account, so it would seem at that point that the child is in fact the bank's customer, though the bank may also want to see the original signed custodianship documentation.


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