A CUTMA bank account is set up for the benefit of a minor child that must be distributed when the child attains a designated age, and is governed by the California Uniform Transfers to Minors Act of the California Probate Code. But, what if when the child reaches the age of distribution he or she is not financially mature enough to handle a large sum of money? In a CUTMA account, distribution is mandatory. Thus, a CUTMA account lacks the safeguards of having a trustee manage the assets for the benefit of a child. This is when detailed and proper estate planning such as a Trust and Will, is far more favorable over a CUTMA account.
Custodians serve as managers of the CUTMA account. Usually, the person establishing the CUTMA Account will serve as the custodian. But what happens if the custodian passes before the assets are distributed to the child? If a CUTMA account has not been distributed and the custodian dies without appointing a successor custodian, then a probate court order would be required to appoint a successor custodian to distribute the assets.
Before setting up a CUTMA account, consider speaking to a legal professional to determine if a CUTMA account is the best choice for your estate and family. Many factors should be considered before you create a CUTMA account, including time of distribution, choice of successor custodian, and how the CUTMA account integrates with your other estate planning.
Here at Chauvel & Glatt we know that your assets are important to you and that you want to ensure that your property will be distributed according to your wishes for the best interest of your beneficiaries. We value our work and want to assist you in the best way we can. To learn how our attorneys can assist you with your estate planning or other legal needs, contact us today.