Can creditors go after this Account? What can we do to protect our money. My son is now 28 years old and lives in Colorado.
An UTMA Account, or Universal Transfers to Minors Act Account, is an irrevocable custodial savings account. These accounts exist because minors cannot legally inherit funds. Generally, the flip side of this is that minors legally cannot incur debt. The idea behind this is that minors are offered special protections from creditors AND themselves through limited access to inherited funds (to prevent frivolous spending). Once funds are transferred into an UTMA Account they are no longer yours, but actually your sons as the owner/beneficiary of the account. You are merely the custodian until he reaches a certain age.
The issue with the facts you present above is that your son is no longer a minor and the funds in the UTMA Account are rightfully his. Depending upon the UTMA Account in question, the debts of your son may have become legally enforceable against him and his UTMA Account as early as age 18 or 21 (Minnesota's default is 21).
I do not believe that there are any ways to legally protect this money from your sons creditors through your personal or legal action. I would suggest having your son visit with a Colorado estate planning and/or bankruptcy attorney.
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