Opening Minor Accounts In Louisiana - Lba

DIFFERENCES BETWEEN UGMA AND UTMAUNIFORM GIFT TO MINORS ACTUNIFORM TRANSFER TO MINORSACTType of PropertyCash, securities and life insurance.Type of PropertyNo restrictions--i.e. real estate, limitedpartnership interests, tangible personalproperty, patent royalties, copyright royalties,and oil and gas royalties, etc. plus the cash,securities and life insurance you can put in aUGMA.AgeCustodian must release the funds to the minorat age 18.AgeCustodian must release property to minor atage 21 (Louisiana is exception to thisremaining at age 18)."Gifts"The UGMA is restricted to lifetime gifts madeby the donor to the custodial account."Transfers"Includes both transfers to the custodial accountas well as gifts to the custodial account. Forinstance, transfers made to the minor under awill or funds received by debtors as well asproceeds of the lawsuit."Powers of Custodian"Investment powers largely passive."Powers of Custodian"The custodian has broader investment powersand can invest with same skill and care thatthey would a prudent person with their ownproperty.OPENING MINOR ACCOUNTS IN LOUISIANA 2009 gettechnical inc.www.gettechnicalinc.com17

FLOWCHART: UTMA AT DEATHDEATHCustodianDiesChild DiesFunds go tothe child’sestateDocumentation1. Death Certificate2. Letters ofAdministration orLetters ofTestamentaryDid custodian namesuccessor?YESSuccessorcustodian takesover ascustodianNOIf child isover 14and acts in60 daysmay nameowncustodiansubject tostate lawIf not, thenlegalguardianbecomescustodianDocumentation1. Death Certificate on custodian2. Identification on new custodian3. New signature cardOPENING MINOR ACCOUNTS IN LOUISIANA 2009 gettechnical inc.www.gettechnicalinc.com18

LAW: UNIFORM TRANSFER TO MINORSREVISED STATUTESTITLE 9 CIVIL CODE—ANCILLARIES CODEPRELIMINARY TITLE--OF THE GENERALDEFINITIONS OF LAW AND OF THEPROMULGATION OF THE LAWSCODE TITLE VIII--OF MINORS, OF THEIRTUTORSHIP AND EMANCIPATIONCHAPTER 1. TUTORSHIPPART I. APPOINTMENT, RECOGNITION, ORCONFIRMATIONPART II. MANAGEMENT AND DISPOSITION OFPROPERTYSUBPART F. UNIFORM TRANSFERS TOMINORS ACTR. S. 9:751. DefinitionsAs used in this Subpart:(1) "Adult" means an individual who has attained theage of eighteen years.(2) "Benefit plan" means an employer's plan for thebenefit of an employee or partner.(3) "Broker" means a person lawfully engaged in thebusiness of effecting transactions in securities orcommodities for the person's own account or for theaccount of others.(4) "Court" means a court of competent jurisdiction inthe parish of the domicile of the minor.(5) "Custodial property" means any interest inproperty transferred to a custodian under this Subpartand the income from and proceeds of that interest inproperty.(6) "Custodian" means a person so designated underR. S. 9:759 or a successor or substitute custodiandesignated under R. S. 9:768.(7) "Financial institution" means a bank, trustcompany, savings institution, or credit union, charteredand supervised under state or federal law.(8) "Legal representative" means an individual'spersonal representative or tutor.(9) "Member of the minor's family" means the minor'sparent, stepparent, spouse, grandparent, brother, sister,uncle, or aunt, whether of the whole or half blood orby adoption.(10) "Minor" means an individual who has notattained the age of eighteen years.(11) "Person" means an individual, corporation,organization, or other legal entity.(12) "Personal representative" means an executor,administrator, or representative of a decedent's estateor person legally authorized to perform substantiallythe same functions.OPENING MINOR ACCOUNTS IN LOUISIANA 2009 gettechnical inc.www.gettechnicalinc.com(13) "State" includes any state of the United States,the District of Columbia, the Commonwealth of PuertoRico, and any territory or possession subject to thelegislative authority of the United States.(14) "Transfer" means a transaction that createscustodial property under R. S. 9:759.(15) "Transferor" means a person who makes atransfer under this Subpart.(16) "Trust company" means a financial institution,corporation, or other legal entity authorized to exercisegeneral trust powers.(17) "Tutor" means a person appointed or qualified bya court to act as guardian of a minor's property or aperson legally authorized to perform substantially thesame functions, including but not limited to a curator.Acts 1987, No. 469,§ 1, eff. Jan. 1, 1988.R. S. 9:752. ScopeA. This Subpart applies to a transfer that refers to thisSubpart in the designation under R. S. 9:759(A) bywhich the transfer is made if at the time of the transfer,the transferor, the minor, or the custodian is a residentof this state or the custodial property is located in thisstate. The custodianship so created remains subject tothis Subpart despite a subsequent change in residenceof a transferor, the minor, or the custodian, or theremoval of custodial property from this state.B. A person designated as custodian is subject topersonal jurisdiction in this state with respect to anymatter relating to the custodianship.C. A transfer that purports to be made and which isvalid under the Uniform Transfers to Minors Act, theUniform Gifts to Minors Act, or a substantially similaract, of another state is governed by the law of thedesignated state and may be executed and isenforceable in this state if at the time of the transfer,the transferor, the minor, or the custodian is a residentof the designated state or the custodial property islocated in the designated state.Acts 1987, No. 469,§ 1, eff. Jan. 1, 1988.R. S. 9:753. Nomination of custodianA. A person having the right to designate the recipientof property transferable upon the occurrence of afuture event may revocably nominate a custodian toreceive the property for a minor beneficiary upon theoccurrence of the event by naming the custodianfollowed in substance by words: "as custodian for(name of minor) under theLouisiana Uniform Transfers to Minors Act." Thenomination may name one or more persons assubstitute custodians to whom the property must be19

transferred, in the order named, if the first nominatedcustodian dies before the transfer, or is unable,declines, or is ineligible to serve. The nomination maybe made in a will, a trust, a deed, or in a writingdesignating a beneficiary of contractual rights which isregistered with or delivered to the payor, issuer, orother obligor of the contractual rights.B. A custodian nominated under this section must be aperson to whom a transfer of property of that kind maybe made under R. S. 9:759 (A).C. The nomination of a custodian under this sectiondoes not create custodian property until the nominatinginstrument becomes irrevocable or a transfer to thenominated custodian is completed under R. S. 9:759.Unless the nomination of a custodian has beenrevoked, upon the occurrence of the future event thecustodianship becomes effective and the custodianshall enforce a transfer of the custodian propertypursuant to R. S. 9:759.Acts 1987, No. 469,§ 1, eff. Jan. 1, 1988.R. S. 9:754. Transfer by giftA person may make a transfer by irrevocable gift to acustodian for the benefit of a minor pursuant to R. S.9:759.Acts 1987, No. 469,§ 1, eff. Jan. 1, 1988.R. S. 9:755. Transfer authorized by will or trustA. A personal representative or trustee may make anirrevocable transfer pursuant to R. S. 9:759 to acustodian for the benefit of a minor as authorized inthe governing will or trust.B. If the testator or settlor has nominated a custodianunder R. S. 9:753 to receive the custodial property, thetransfer shall be made to that person.C. If the testator or settlor has not nominated acustodian under R. S. 9:753, or all persons sonominated as custodian die before the transfer, or areunable, decline, or are ineligible to serve, the personalrepresentative or the trustee, as the case may be, shalldesignate the custodian from among those eligible toserve as custodian for property of that kind under R.S.9:759(A).Acts 1987, No. 469,§ 1, eff. Jan. 1, 1988.R. S. 9:756. Other transfer by fiduciaryA. Subject to Subsection C of this section, a personalrepresentative or trustee may make an irrevocabletransfer to another adult or trust company as custodianfor the benefit of a minor pursuant to R. S. 9:759, inthe absence of a will or under a will or trust that doesnot contain an authorization to do so.B. Subject to subsection C of this Section, a curator ortutor may make an irrevocable transfer to another adultOPENING MINOR ACCOUNTS IN LOUISIANA 2009 gettechnical inc.www.gettechnicalinc.comor trust company as custodian for the benefit of theminor pursuant to R. S. 9:759.C. A transfer under Subsections A or B of this Sectionmay be made only if all of the following occur:(1) The personal representative, trustee, curator, ortutor considers the transfer to be in the best interest ofthe minor.(2) The transfer is not prohibited by or inconsistentwith provisions of the applicable will, trust agreement,or other governing instrument.(3) The transfer is authorized by the court, if itexceeds ten thousand dollars in value.Acts 1987, No. 469,§ 1, eff. Jan. 1, 1988.R. S. 9:757. Transfer by obligorA. Subject to Subsections B and C of this Section, aperson, not subject to the provisions of R. S. 9:755 or756, who holds property of or owes a liquidated debtto a minor not having a tutor may make an irrevocabletransfer to a custodian for the benefit of the minorpursuant to R. S. 9:759.B. If a person having the right to do so under R. S.9:753 has nominated a custodian under that Section toreceive the custodial property, the transfer shall bemade to that person.C. If no custodian has been nominated under R. S.9:753, or all persons so nominated as custodian diebefore the transfer or are unable, decline, or areineligible to serve, a transfer under this section may bemade to an adult member of the minor's family or to atrust company unless the property exceeds tenthousand dollars in value.Acts 1987, No. 469,§ 1, eff. Jan. 1, 1988.R. S. 9:758. Receipt for custodial propertyA written acknowledgment of delivery by a custodianconstitutes a sufficient receipt and discharge forcustodian property transferred to the custodianpursuant to this Subpart.Acts 1987, No. 469,§ 1, eff. Jan. 1, 1988.R. S. 9:759. Manner of creating custodial propertyand effecting transfer; designation of initialcustodian; controlA. Custodial property is created and a transfer is madewhenever:(1) An uncertificated security or a certificated securityin registered form is either of the following:(a) Registered in the name of the transferor, or a trustcompany followed in substance by the words: "ascustodian for (name of minor) under theLouisiana Uniform Transfers to Minors Act".(b) Delivered if in certificated form, or any documentnecessary for the transfer of an uncertificated securityis delivered, together with any necessary endorsement20

to an adult other than the transferor or to a trustcompany as custodian, accompanied by an instrumentin substantially the form set forth in Subsection B ofthis section.(2) Money is paid or delivered to a broker or financialinstitution for credit to an account in the name of thetransferor, an adult other than the transferor, or a trustcompany, followed in substance by the words: "ascustodian for (name of minor)under the Louisiana Uniform Transfers to MinorsAct".(3) The ownership of a life or endowment insurancepolicy or annuity contract is either of the following:(a) Registered with the issuer in the name of thetransferor, an adult other than the transferor, or a trustcompany, followed in substance by the words: "ascustodian for (name of minor) underthe Louisiana Uniform Transfers to Minors Act".(b) Assigned in a writing delivered to an adult otherthan the transferor or to a trust company whose namein the assignment is followed in substance by thewords: "as custodian for (

their deposit agreements for these accounts or have the parents on the joint account sign a separate agreement in which they agree to be responsible for the child's activity on the account. See Personal Accounts--Joint Accounts on page. OPTION #4 PARENT ITF/POD CHILD Accounts where the adult sets up a trust which is payable at death to a child.