UTMA Account after Majority Age is Reached

I recently found out that I have a UTMA account with Fidelity that was set up by my grandmother who is also the named custodian of the account. Her and I are not on speaking terms and haven't been for many years. She called me wanting to sign over the account to her since she helped my husband and I purchase a car 8 years ago and this money should be repaid with the funds from the UTMA. From what I know NO funds have ever been withdrawn from this account she has always used her personal money to gift me things. I don't have a problem repaying her the money for the "car loan" as shes calling it but she wants all the money. My question is can she fight me on this in court since the "car loan" was given years after I had already hit majority (27) or can she still go after me when the money should have been mine at 21? I guess Fidelity has been sending out letters to custodians because they are noticing they have a ton of accounts that are in this same boat but without the family drama. I am in AZ. Any tips/advice is greatly appreciated. Thanks! 

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    • WordTenor
    • I have the honor to be your obedient servant
    • WordTenor
    • 8 mths ago
    • Reported - view

    IANAL, but I did have two UTMAs. If your name and social are on the UTMA, the money is yours. Fidelity will send you a document for which you’ll need a medallion guarantee signature (usually done at a bank branch) and then you can transfer the money wherever you want. The whole idea of an UTMA is the “T”: the money transfers to the minor.

    As far as I know, the car money is legally a gift. It’ll be hard for her to prove otherwise unless she drew up loan documents. You don’t have to pay it back, but it’s probably a nice thing to do. I would tell grandma how grateful you are to her for helping you get a good start financially, pay her the car loan money back, and tell her you will do good, productive things with the money she invested on your behalf so many years ago. 

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  • Money deposited into a UTMA account is an irrevocable gift to the minor.

    To make peace, you can transfer the UTMA into an account in your name only since you've reached age of majority, and then just use some of the money topay back the "loan". I wouldn't hand over a penny more.

    But of course technically you don't owe anyone anything since it wasn't really a loan.

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  • I appreciate both of your responses. From what the risk department at Fidelity is telling me she is technically still the owner of the UTMA account and should've signed it over at 21 (reason for sending letter out) but she refuses to do this. I have discussed with them I am way past age of majority and should've been notified but they say I still need a court order. 

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      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 8 mths ago
      • 1
      • Reported - view

      Gray Guitar Are you sure they said court order, and are you sure this is actually an UTMA? 

      UTMAs do not require signing over. They require proof of identity of the minor and proof of majority age of the minor. I am absolutely on speaking terms with my parents, but we were living 500 miles apart when I transferred mine and it was simpler for me to just do the legwork to get the official proof of my age and identity so I could move the money to new investments.

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  • Yes they told me it was a UTMA account and yes he said the only way they can hand over the account is when the custodian signs it over, even if I am 85 he said I need her signature, and if I cannot get that I need a court order for the funds to be released. I guess they have had some issues with UTMAs recently and some rules/policy changes have been made on this. I am not sure if I need to try and escalate. I tired calling a customer service investor and asked as if I was going to set up a UTMA for my kids. He said the same thing that I will have to sign the account over to them even after majority. To me what's the point of these accounts then? He said in most cases the custodian has no issue signing over I am a special situation. Very frustrating. 

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  • I have been told by 4 people at Fidelity to confirm it is a UTMA account. 

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 8 mths ago
      • 2
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      Call back and escalate to someone who actually knows what they are talking about. If you are the named minor, all you need to do is a change of registration on the account. The custodian need not be involved as it is not their account.

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      • Gray Guitar
      • Gray_Guitar.4
      • 8 mths ago
      • 2
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      nolesrule From the research I have done you are right on point. I don't understand a custodian account if I the beneficiary is never able to take it over but I will try another phone call today. I have sat with a branch manager but he has escalated the issue to legal. Waiting on a response. Thanks for the advice. Much appreciated. 

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      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 8 mths ago
      • Reported - view

      Gray Guitar Definitely keep pressing. Taking custodianship is certainly a pain in the tuchis and does require official documentation, and perhaps that’s what the frontline people are reacting to. But it doesn’t require going to court. 
       

      I don’t trust frontline people. I once had a phone conversation with somebody at Navient who didn’t know the difference between compounded interest and capitalized interest, which is a pretty danged important distinction for a student loan in deferment. 

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    • WordTenor
    • I have the honor to be your obedient servant
    • WordTenor
    • 8 mths ago
    • 3
    • Reported - view

    PS come back and tell us what happened when you’re through! I’m all up in arms with righteous indignation on your behalf now! 😂

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    • this is what i was referred to by fidelity and to me it looks like i need her signature :/ 

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