money in your kids' checking accounts?

[applecake]

I think I know the answer to this, but I told DH I would check it out. We have a 16yo who works part time. He has about $800 saved in his checking account - he's saving it to pay his part of the car insurance when he gets his license. It has absolutely nothing to do with us - it's not our money; we're not hiding it in his account or anything like that. (Dude, if it were ours, we'd have used it by now!) My question is, will his money even come into play at all? I can't imagine that it would, but I just wanted to be sure. Thanks!

[HHM]

No, the money will not come into play in your BK.

[DopeyDwarf]

My kids bank accounts had to be emptied out, just like ours had to be at or close to $0. We were informed by our lawyer that because the kids are minors, we oversee their finances. It was one of the worst things I have had to do during our bankruptcy, after finally teaching our kids how to SAVE money, then turning around and telling them they had to SPEND it!!

[HHM]

Your lawyer was being overly conservative.

[justbroke]

I wonder why there's such a conflict in what some lawyers tell clients. Nowhere in the code does it read that someone else's money come into your BK.

This has been very well litigated. The Trustee and the Court cannot exercise control over something that is not yours. Your child's money, is, not yours. While you may exercise some control over it... the Court can't subsequently exercise control over the same.

It would be equivalent to you administering your (passed away) mother's Estate -- as Executor -- and the Trustee coming and taking everything from your mother's Estate.

Just can't do that.

[TEW]

I wonder why there's such a conflict in what some lawyers tell clients. Nowhere in the code does it read that someone else's money come into your BK.

This has been very well litigated. The Trustee and the Court cannot exercise control over something that is not yours. Your child's money, is, not yours. While you may exercise some control over it... the Court can't subsequently exercise control over the same.

It would be equivalent to you administering your (passed away) mother's Estate -- as Executor -- and the Trustee coming and taking everything from your mother's Estate.

Just can't do that.

[justbroke]

I think a lot has to do with The Individual’s case

I would agree where there may be the presumption or appearance as if the Debtor hid or intended to hide assets in the Child's account. (This could simply be that there are one or more commas in the number which represents the balance! And, not just simply that... it should have at least 5 digits left of the decimal... then maybe I could see that. But it's still HIDING assets if you drain it. )

Otherwise, I don't see the issue.

[Flamingo]

If you claim your son as a dependent for tax purposes and he is working part-time as you state and living with you, his income is part of your household income. The $800 he earned by working and is in his savings account is technically money that could fall in the realm of household income. When he files his taxes he has to list himself as being your dependent, claiming zero, and can make up to a certain amount in the tax year ($3,800 I believe) without taxes withheld. I would just ensure your attorney is aware of all that and why the funds are in his savings and how the funds got there and follow his advice as to your particular situation.

[merlotwaytogo]

utma accounts??

My children have had savings accounts since they were born. They are utma and I am the custodian. I can track all deposits(all small) since they were born. I have never touched their money. They have combined about 10k. Please tell me the trustee does not care about this money.

[justbroke]

My children have had savings accounts since they were born. They are utma and I am the custodian. I can track all deposits(all small) since they were born. I have never touched their money. They have combined about 10k. Please tell me the trustee does not care about this money.

Not in your case. It's clearly the child's money and in the child's name. It is also an old account, and I assume there were no recent and large deposits?

[DopeyDwarf]

My kids had less than $100 in each account, we were still told to get them as close to zero on the day we filed, and to have receipts for what we bought with that money. Our 341 is on Mon, and our kids accounts were one of the things we were requested to provide more information about. Just an FYI for you all, as previously mentioned, these accounts had LESS than $100 each.

[Flamingo]

My children have had savings accounts since they were born. They are utma and I am the custodian. I can track all deposits(all small) since they were born. I have never touched their money. They have combined about 10k. Please tell me the trustee does not care about this money.

Since you are the custodian you have access to that money and your name is on the account probably along the lines "xxxxx for the benefit of xxxx." Nothing prevents you from accessing that money so it is available to you. Your chidren cannot go in and take the money out themselves. The best thing to do is to be open and honest about all this with your attorney who will guide you accordingly as to your particular situation.

[justbroke]

This may be District specific. However, an irrevocable trust is hard for the Trustee to exert control over.

In any event, it is better to be safe than sorry, or have to litigate over this.

It's a shame.

[CSAS]

I was told

I was told that since my name is on the account also, the account would come into play. If I exempted it, I would have to exempt half. Since they will see it as half his and half mine. If you decide to take the money out and spend it, keep your receipts. We took some out and are using it for the down payment for his braces.
HTH

[justbroke]

I was told that since my name is on the account also, the account would come into play. If I exempted it, I would have to exempt half. Since they will see it as half his and half mine. If you decide to take the money out and spend it, keep your receipts. We took some out and are using it for the down payment for his braces.
HTH

Now that, having your name on it, can be seen as a jointly held account and subject to 50% of it falling under the control of the Trustee.

The real kicker is, the Trustee is really looking for money which people may have hid in that account.