Legal Question in Bankruptcy in California

How a bankruptcy affects stock accounts held in custodian minor's name

Need to file bankruptcy. Aunt has invested $20,000 in stock for education of minor children (age 4&5). I am transferring accounts to minor, I am custodian, aunt has power of attorney. Will bankruptcy affect these minor accounts? If so, how should I transfer accounts to protect their education fund?

Asked on 8/11/00, 2:16 pm

2 Answers from Attorneys

Shai Oved The Law Offices of Shai Oved
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Re: How a bankruptcy affects stock accounts held in custodian minor's name

It is not clear how the accounts were set up. Are the accounts in your name or are you the custodian for the benefit of your children? It makes a difference. In either case, the accounts should be listed in your bankruptcy papers.

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9/18/00, 3:02 am
Mark Markus Law Office of Mark J. Markus
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Re: How a bankruptcy affects stock accounts held in custodian minor's name

I assume that these accounts are in your name or that you can withdraw money from them? If so, there is no way to protect them in their present state. If the money was for the childrens' education it should have been put into an irrevocable trust. There may be problems doing that now since it will look like you're doing it to evade your creditors. You should have a consultation with an attorney to analyze all the possibilities and assess the risks.

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9/13/00, 10:01 pm

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