Keeping Assets in a Custodial Account for a Minor

 Minors have no legal capacity to manage property. Thus, transferring property and other assets to minors can be problematic. For example, parents or other adults may wish to convey a small amount of property to a minor without investing the time and expense of establishing a trust.

Another option is to set up a custodianship for the minor. Under a custodianship, the transferring party names a custodian and transfers the property into an account in the minor’s name. The custodian holds and manages the custodial property for the benefit of the minor. A custodial account is irrevocable and belongs to the minor as the owner.

Uniform Transfers to Minors Act (UTMA)

The Uniform Transfers to Minors Act of 1986 (UTMA) was passed in order to eliminate some limitations of the earlier Uniform Gifts to Minors Act (UGMA). All states have adopted some form of the UTMA or UGMA. The UTMA provides a convenient method of allowing the transfer of property to minors without setting up a trust.

In a custodianship, an adult custodian holds and manages property for the benefit of a minor child until that minor is old enough to receive the property. A UTMA transfer is irrevocable, and the custodian must relinquish the property to the minor as soon as they reach the age of majority, which varies by state (usually 18 or 21, sometimes 25)

 

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Consequences of Falling Behind on Child Support Payments

Child support payments may either be ordered by the court in a divorce decree or legal separation agreement or mutually agreed upon by the parties. Several laws exist which are designed to make child support orders readily enforceable across the United States. However, despite such efforts, "dead-beat dads," or parents who consistently fail to make support payments in full or at all, continue their delinquencies. As a result, there are further measures available for the collection of child support payments.


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Procedural Considerations for Parents Seeking to Modify Child Support

Frequently, as a result of a change in circumstances, parents seek to modify child support orders. Although the law varies considerably among states, delaying or failing to modify child support to reflect current circumstances can have a serious impact on both parents (whether recipient or payor) and children.

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UMDA Standards for Modification of Child Support

Although the law with respect to child support modification varies considerably by state, generally, before a court will modify a child support order, the requesting parent is often required to show that changed circumstances legitimately warrant the modification. Without this requirement, frequent, repeated and arbitrary requests for modification would burden the already overcrowded court system, as well as the non-custodial parent.


The Uniform Marriage and Divorce Act

While some states have implemented child support modification standards derived from judicial decisions, other states have implemented statutory provisions that closely resemble the language set forth by the Uniform Marriage and Divorce Act (UMDA). According to the text of the UMDA, a child support order may be modified, with few exceptions, "only upon a showing of changed circumstances so substantial and continuing as to make the terms unconscionable." Consider the following examples of state legislation:


Arizona: "Substantial and continuing change of circumstances"
Idaho: "Substantial and material change of circumstances"
Pennsylvania: "Material and substantial change in circumstances"
Typically, the parent requesting the modification has the burden of proving the change in circumstances.

Practical Considerations Regarding Child Support Modification

Frequently, as a result of a change in circumstances, parents seek to modify child support orders. Although the law varies considerably among states, delaying or failing to modify child support to reflect current circumstances can have a serious impact on both parents (whether recipient or payor) and children.

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