Can My Ex-Husband Withdraw Money From a Custodial Account?
Typically, married parents are both named as custodians of the account of their minor child. Meaning, both parents have the right to make deposits to and withdrawals from the account. When parents divorce, if one person is not designated as the custodian of the account and the other person is not removed as a joint custodian, both parents may make withdrawals from the account.
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Custodial Accounts
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A custodial account is a financial account that an adult sets up on behalf of a minor child. Examples of custodial accounts include savings, checking and investment accounts. The Uniform Gift to Minors Act and the Uniform Transfer to Minor Act allows minor children to own assets and securities investments without the parents having to go through the more costly process of starting a trust for their minor children.
Divorce
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When going through a divorce, custodial accounts should be divided between you and your ex-husband just as you would divide other asset accounts. The divorce agreement should clearly state the terms and conditions to which the custodial account owner can make withdrawals. Both of you have to sign the paperwork with the financial institution to remove his name as a custodian on the account. If your ex-husband is no longer a custodian, he cannot make any withdrawals. If your ex-husband is still named as a custodian on the account after the divorce, he can legally make withdrawals.
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Asset Ownership
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When you open a custodial account for your minor child under the UGMA and UTMA, the assets in the account belong to your minor child. This doesn’t mean you or your ex-husband cannot make withdrawals if he is still a custodian on the account, but he can only do so if the withdrawals were made for the benefit of the child. If your ex-husband makes withdrawals that are not specifically for the benefit of your child, you or your minor child then may have grounds to petition the family court asking for him to return the money he withdrew.
Allowable Withdrawals
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If your ex-husband withdrew money from the custodial account to pay for your child’s education or the taxes on the account, these are considered withdrawals made in the best interest of the child and are allowable. However, if your ex-husband withdrew the money because he needed to buy a new car or pay a credit card bill, these expenses do not directly benefit your child and you may petition the family court for the return of the funds to the custodial account.
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