UTMA to age 25 in California if child 18
My client wanted to name his 18 year old granddaughter as a beneficiary with UTMA wording. In California the age of majority extends to age 25 if the child is named in a trust. This is true even if the child is named individually as an IRA beneficiary. Schwab told me that they would not recognize the age 25 extension. I found nothing in their IRA account agreement stating that they could not recognize age 25. Has anyone been able to extend the Schwab beneficiary UTMA to age 25? I find that Schwab gives different opinions depending on the person in their estate section we speak to.
Many thanks as always ….. Mary Dean
Permalink Submitted by William Tuttle on Mon, 2017-02-20 22:29
IANAL, but I would think that you can not create a UTMA account for an individual who is not a minor. So, the whole age 25 issue may be mute. Also, just because the law might allow something, does not require a finacial institution to adopt such a policiy.
Permalink Submitted by Mary K. Dean on Wed, 2017-02-22 00:47
Per California Probate Code 3900-3925 in particular 3901 k (2) someone can start a UTMA up to age 25 if the child is a trust beneficiary. An attorney stated this as well and was upset that Schwab would not agree to the California law. I can understand Schwab following their IRA account agreement but the agreement just says that the laws will be followed. In short they are verbally more restrictive.
Permalink Submitted by Alan - IRA critic on Wed, 2017-02-22 03:56
Appears to me that if the minor contests the extension of time, Schwab would have to examine the governing will or trust to be sure it conforms. Has Schwab provided a specific reason why they have adopted this restriction? It doesn’t appear that examing the will or trust would be more onerous than the review to determine if a trust is qualified for look through treatment. FWIW, I believe Schwab is generally seen as much more flexible in these areas than Vanguard.