If I open a account for my child and I'm one of the account users and I have debt problems due to a bad divorce, can creditors go after that account?
If the account is in your name, with either a Totten trust or a Payable on Death designator, listing the child as a beneficiary, creditors may find it relatively easy to reach funds in the account, since you will be the legal owner. If the funds are in your child's name with you as custodian, creditors will have a harder time of it. However, any creditor could try to convince a court to overturn transfers of funds into the account as attempts to illegally shelter the funds from the creditor's reach. How such an argument would fare would depend on state law and the facts of the individual case. If the funds are actually your child's assets, they should be protected. Ask an attorney for guidance on how best to protect your child's funds from your creditors.
BankingQuestions.com is a free service made possible by the generous support of our advertisers. Advertisers are not responsible for site content. Please help us keep BankingQuestions.com FREE by supporting our advertisers. When you see an ad for a product or service you may have an interest in, click through to learn more.
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
If the account is in your name, with either a 