Is a Minor Savings Account Exempt From Divorce?


In any divorce, one of the most difficult processes -- beyond the emotional -- is the equitable distribution of joint property. If a marriage has lasted for a long while, even separate property can become commingled and sometimes an accountant will be required in order to trace the assets and determine which are joint property and which are not. In general, property -- including savings, certificates of deposit and other accounts -- in a minor's name is the property of the minor and not the property of the parent. However, several factors must be taken into account.

General Accounts

General savings, banking and other such accounts are usually the property of the person whose name is on the account. If a minor's name is on the account, it is hers and not the property of either spouse. Therefore there is usually no standing for division and equitable distribution of the money in the account.

UGMA/UTMA Accounts

These accounts are established under the Uniform Gifts to Minors Act or Uniform Transfers to Minors Act. Such accounts are not accessible by the minor until she is 18 or older, but are accessible my custodians of the minor. Most often, these are considered the minor's property and are excluded from marital property.


The exception for the aforementioned accounts is when money is taken out of the accounts in order to pay for marital expenses. Unless that money is paid back -- indicating that the parents' control of the account is exceptional and temporary -- the account might be considered joint property and be subject to equitable division. There is also the issue of control over the account. While parents always act as custodians of their children's property, if no control over the account -- in the form of a passbook, certificates or possibly a debit card -- is given to the minor, there may be some standing to declare the account marital property. This is especially true if the divorce is not between the minor's parents. For instance, if the grandparents were the ones undergoing divorce proceedings, and control over the account was never given to the child's custodians or parents, it may be ruled that the account is the grandparents' marital property.


There is a further exception that applies to UGMA/UTMA accounts. Because of the lower tax rate incurred on deposits in such accounts, some individuals have deposited extra money into such accounts without any intention of making a gift to the minor. If they always intended to use the money within the account as their own, or stated that the account was their own, without any indications of turning it over to the minor, the account may be ruled marital property. In such a case it would be subject to equitable division.

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