<p>A close friend of mine is getting a divorce. His wife is the current custodian of their kid’s UTMA accounts. With the current down slide in the economy his wife took money out of the kid’s accounts to pay for general expenses and not for the benefit of the kid’s. Is there any rules/laws that have been broken? At the very least he wants to have her removed as the custody but I think he is outgunned since his lawyer is incompetent and I am afraid that in addition to custody of the kids that his wife will retain custody of the kid’s account UTMA accounts and spend them just like she did the rest of the family finances. Thanks if anyone knows any rules i can research further.</p>
<p>Contact the office of the Comptroller they are the ones who administer the account so they should be able to give you a solid answer.</p>
<p>It’s a little complicated because UTMAs are state-specific, and subject to the laws of the state where originally established. But what’s not complicated is that the funds in a UTMA are held in trust for the beneficiary and are to be used for the benefit of the child until the child turns 18 or 21, at which point the account legally belongs to the child. Your friend would need to refer to state law for the specific rules he’d have to follow to make a custodian change or sue to recover the funds.</p>
<p>I’ve read about a case in Colorado where the children sued the custodian who had used the money for other purposes. Here’s another case:</p>
<p>[Fleming</a> & Curti, P.L.C. - UTMA Custodian Accountable After Beneficiary’s Majority](<a href=“http://www.elder-law.com/2010/Issue1704.html]Fleming”>http://www.elder-law.com/2010/Issue1704.html)</p>