Uniform gift/transfer to minors act ca

[007]

What is the name of your state (only U.S. law)? CA
My wife believed that her former father in law had purchased Microsoft Stock Shares for his grand daughter and grand son, when they were born in '90 and '92, respectively. The "former" father (I adopted his children at his request and my pleasure and love for them) said no such stocks, account exist and that my wife was fabricating this. He stated this in court proceedings. Well I have found the stocks and they were sold last year, March 2008, seven months before my daughter's 18th Birthday. The account has a 1099 Div and shows there were 400 shares but could not produce more information on my daughter's request because the agent was no longer with American Stock and Transfer Co.

So I (my 18 yr old daughter) have account information which shows shares were surrendered last year when her former father told here she should emancipate herself and then pushed her to me for adoption. This was crushing my daughter so I adopted her since she saw her father was simply abandoning her. But it was around this time that her former grandfather sold and moved these shares. As I understand the UGM is an irrevocable gift. The grandfather contributer was also the custodian. Is he required to surrender those shares or sales of those shares to my daughter? Do I file a law suit, subpoena tax and financial records from the custodian, former father, etc? Help.

[tranquility]

You've got nothing. If you sue with the current facts you have, you will be countersued for malicious prosecution and will lose the cost of the other party defending the suit. What facts do you have or suspect will *prove* the stock belongs to your daughter?

[007]

Originally Posted by tranquility

You've got nothing. If you sue with the current facts you have, you will be countersued for malicious prosecution and will lose the cost of the other party defending the suit. What facts do you have or suspect will *prove* the stock belongs to your daughter?

My daughter supplied a letter with her SSN and birth certificate to AST who then provided her with the account information which shows that she had an account in her name under the CA UNIFORM TRANS MIN ACT 21 with her SSN as the tax person on the 1099 DIV. The account shows 400 shares were surrendered in March 2008. Her grandfather, still alive, is/was listed as the custodian.

UTMA's are, as you must know, irrevocable gifts to minors to be transferred to them upon the legal age. Any fiduciary activities need to be well documented. Also, since the grandfather was the gifter as well as the custodian, and now that the investments have seemed to disappear, the actual gift can be tied to his estate...just stating what I've read.

So my daughter has a vacant account [her name, ssn and type account listed] with history dating back to 1998, at American Stock and Transfer, and shows it was basically sold...even a 1099DIV for the tax year 2008. Unless he reinvested (and he needs to show the dollar amounts invested and appropriate paper trail), he's not planning on transferring this gift.

...that's my proof

[007]

...by the way, thanks for keeping my rational and facts clear and up front. I did not realize it sounded like I was simply "guessing" that there was an account; there is definitely an account in my daughter's name.

[tranquility]

The first step is for daughter to demand an accounting of the trustee. Send it by certified mail with return receipt requested. Give him 30 days to respond or daughter will "explore her legal remedies." See what happens. If no response, you need an attorney.

[007]

Yes Sir. My daughter already signed the letter. I had intended to certify it with return receipt, and did not think to calendar it with 30 days- good call. Do you suggest requesting a reply within a time frame, or to just wait until 30 days has passed before filing subpoenas for financial activity back to the mayflower as well as IRS returns, tied to a suit opened to recover these assets? I am in the process of finding a securities attorney now.

Also, my 16 yr old son should have/had an account for him too. I think however, that I cannot conclude a need for the court to force custodial rights to a third party or even me until it is found that 1) he's conducted himself unlawfully, and 2) there is an obvious conflict of interest.

Thanks for your help.

[anteater]

A "securities attorney" is way overboard. Those folks get the big bucks. An attorney experienced in probate or estate matters (maybe family law) should be able to handle it.

I doubt that a judge will let you go on a fishing expedition through the grandfather's financial life on a narrow matter. And you already seem to have evidence that the gift was made. If grandfather ignores you, the first step will likely be to simply petition the court to force an accounting.

(You know... There is some slim possibility that grandfather transferred the sale proceeds to another UTMA account. Sounds doubtful, but there is a chance.)

For your son, why not also prepare a letter for him requesting an accounting.

If you want to read the California UTMA statutes, they are here:

[url]http://www.leginfo.ca.gov/cgi-bin/displaycode?section=prob&group=03001-04000&file=3900-3925[/url]

[007]

Perhaps it wouldn't be prudent to try to hire a securities att. I will look into your suggest probate attorney.

I understand, as well, that the stocks could have been moved to another account within the guidelines of UTMA. I made room for that in my letter to him. My daughter's letter simply asked for the information and I followed with another letter (both of which will go out tomorrow) asking for account info for my son (minor) and suggesting that he, the custodian/donor, select another sub-custodian to handle the account to alleviate any conflict of interest, due to the awkwardness of the situation, where he is no longer the grandfather because of the actions of his own son...tip of the iceberg, here.

The letter(s) are not caustic and simply ask for the information. As for the fishing trip, I am not sure I want a long legal battle as well. However, I was reading that given he is the donor and the custodian, it is much a part of his estate. While I don't want my daughter or son tied up in all of this, it may take some accounting to find out where their funds begin and his estate ends. I just want to be prepared to ask for the right accounting records.

Bottom line; I just want this resolved. Thanks for you suggestions - on track and will incorporate.

[anteater]

However, I was reading that given he is the donor and the custodian, it is much a part of his estate.

You've mentioned "estate" several times and I have wondered what you are referring to. The grandfather is still alive, right?

As you noted before, if he made the gift, then the funds are no longer his assets. Being the custodian does not change that.

[007]

Yes the he's still alive. I was reading on another website that accountants advise that one person be the donor and the another the custodian (see quote from other website below). So I need to get an attorney for my daughter, keep things to the point and not get too wrapped up into legal nuances. Protect my son's UTMA as well...thanks again.

BTW the website for the tax law is appreciated, too.

"On a related note, some accountants advise that one person should make the gift and that a different person should be the custodian. The reason is that if the donor and custodian are the same person, that person is considered to exercise sufficient control over the assets to warrant inclusion of the UGMA in his/her estate. For more info, see Lober, Louis v. US, 346 US 335 (1953) (53-2 USTC par. 10922); Rev Ruls 57-366, 59-357, 70-348."

[ THE INVESTMENT FAQ, SUBJECT TAX CODE-UNIFORM GIFTS TO MINORS ACT. [url=http://invest-faq.com/cbc/tax-ugma.html;]Invest FAQ: Failed access[/url] 31 May 2009][/font][/font]

[Dandy Don]

Before you go to the expense of hiring an attorney and requesting information, could you please discuss this matter with a professional who is experienced with UGTMA rules and regulations. Even though it is irrevocable, there are certain conditions under which the person who opened the account can decide to change their mind and cash it in, and that may be what happened here. Maybe there is someone at a local bank, or a certified financial planner, who can advise you who to consult on this matter.

[anteater]

Even though it is irrevocable, there are certain conditions under which the person who opened the account can decide to change their mind and cash it in...

Such as?

Gee, doesn't "irrevocable" kind of mean that you can't change your mind?

Maybe there is someone at a local bank, or a certified financial planner, who can advise you who to consult on this matter.

Any bank employee giving out legal advice should lose their job.

And "certified financial planner" is a designation. It is not some sort of job title. And anyone holding the designation giving out legal advice should lose the designation.

[BlondiePB]

Originally Posted by anteater

Such as?

Gee, doesn't "irrevocable" kind of mean that you can't change your mind?

Yep...oops, I mean nope...oops, I mean yep, oops....

Any bank employee giving out legal advice should lose their job.

And "certified financial planner" is a designation. It is not some sort of job title. And anyone holding the designation giving out legal advice should lose the designation

Yep...and yep...No ifs, whats and buts.

[Dandy Don]

Again you are clogging up the message board with your useless arguments with everything taken out of context.

Irrevocable does mean irrevocable in addition to the fact that there are allowable exceptions. And the planner would be giving out professional advice, not legal advice.

[anteater]

Irrevocable does mean irrevocable in addition to the fact that there are allowable exceptions.

Given the chance to provide an example of an "allowable exception," I note that none is given.

And the planner would be giving out professional advice, not legal advice.

Like how to bring a legal action for the return of the money to the OP's daughter if grandpa doesn't come clean? Oh wait... That's legal advice.