Custodial account question

[Jf24]

I am filing alone, wife is not filing. She gets child support, puts some in custodial account along with babysitting money and birthday and xmas money. Account is in her name and daughters name. About $2000. Is this something that would be taken. Filing 13 soon.

[LadyInTheRed]

The account is safe. A custodial account holds the assets of the minor and is not vulnerable to the creditors of the parents or custodian.

[JessMN]

The trustee did ask for bank statements for my daughter's account, of course there was like $79 so it wasnt a biog deal. I always assumed it was just so he could make sure I wasn't "hiding" money there.

[Jf24]

Thanks, good to hear this. Should the account be known to the trustee.

[Flamingo]

Custodial accounts can be considered assets as they are held in the name of an adult for a minor and are in the adult's name and the adult has access to the funds and can withdraw. Always check with your attorney.

[Jf24]

Is this a district thing or for all. This money is not mine and can cause a big problem if they take it.

[LadyInTheRed]

It's a state law thing and it is true that you should consult your bankruptcy attorney regarding the specific facts related to this account.

But, in general, if you did not contribute any funds to an account and you have no right to the funds in the account, neither your creditors nor the trustee of your bankruptcy estate has any right to the funds.

Even if you had an interest in the account, in a Chap 13, the trustee would not take it as long as your plan provides that your unsecured creditors recieve at least what they would in a Chap 7 liquidation.

[Flamingo]

Is this a district thing or for all. This money is not mine and can cause a big problem if they take it.

Check with your attorney - we had a custodial account for my daughter with funds to start it given to us by my mother and the account was in my name "for the benefit of xxxxx." I had to provide the information and amount in the account to our attorney and trustee. It was not a lot of money but it had to be reported. The reason being is that the custodian has access to those funds and can withdraw them at any time without the permission of the minor child. So those funds are considered an asset to the holder. Unfortunately, that happens a lot as many kids who hit 18 or the designated age find out. It is always best to disclose any financial information in which one's name appears on an account to one's attorney and let the attorney go over the situation. Best of luck to you...