<p>
</p>
<p>Do you mean UGMA (Uniform Gifts to Minors Act) funds? If so, at most the ex was custodian of those funds, with no ownership interest or legal right to use other than for the benefit of the minor owner.</p>
<p>He did use them for the benefit of the minor owner like to pay for support items and things for which they should not have been used and knew full well the understanding, but he found the loopholes . It went to court. Oh, yes, it did. My friend lost. He spent every penny of their college funds and laughed at her. Kids went to school locally on her dime and some fin aid. I am very, very familiar with that case, and he did get away with this. </p>
<p>
</p>
<p>Maybe so, but if it was UGMA money he wasn’t “the owner of the funds.”</p>
<p>He was the custodian, and it was found that he was allowed to use the funds as he did. I would not have ruled as the courts did given the specifics of the case, but he was able to spend all of the UGMA ( and it was) and 529 money. UGMA works differently in terms of ownership of the fund, I reailize .A custodial account under the Uniform Gifts to Minors Act can be used to pay just about any expenditures that can be construed to be for benefit of the child. It’s frequently said, incorrectly, that the expenditures cannot be for something that is included in a parent’s support obligation. The Uniform Act plainly says exactly the opposite. There may be situations where there is a family obligation, as opposed to a legal obligation, not to use the account this way. A custodian of an account should consider whether it is improper, even though legal, to use the account this way, My friends ex could not care less and deliberately drained the account that contained contributions that were not even his. As the custodian, yes, custodian and not owner, he was permitted to do this. That he wasn’t the “owner of the funds” was hardly an issue. </p>
<p>If you don’t worry about the tax implications of doing so, the same can be done as owner of 529s. If there is enough money in there, it can be worth just paying the penalties. In some cases, it’s not even the custodian’s money there so it’s all found money In divorce cases, this is something that should be brought up. I ve now heard of a three cases where this happened. Yes, unhappy exes will plllage a kid’s account.</p>
<p>Sorry, OP, this went way OT and has nothing to do with your situation , though you can see there are parents out there far less interested in kids’ college funds than your mother. There are parents out there that I have personally know who spent up their kids’ college funds even though they were specifically so earmarked, and some who even borrowed in their kids names. All very sad.</p>
<p>I was simply trying to correct something you wrote that could have given the wrong impression; that is, that a custodian of a UGMA account is the legal owner of the account assets.</p>
<p>By the way, nice cut and paste job:</p>
<p><a href=“http://fairmark.com/custacct/support.htm”>http://fairmark.com/custacct/support.htm</a></p>
<p>Sorry, should have given credit. The info there was used, by the way, in the court case. IMO, the ex was using the funds for which he was the custodian in payment of support obligations which the article indicates is against rules. But it involved court ordering payment of private school for the kids, and he was able to use the funds for that purpose. My friend fought the case through appeals and lost bady. Most of that money had been placed there by her mother and other relatives, and the children themselves, not by her or her ex, and for that money to have been spent that way was outrageous,again IMO. But the courts decided otherwise. She had an outstanding attorney, case was well presented by all regards, but the decision was against her. Custodian or owner, was hardly an issue in the case, as he drained the accounts just as handily as he did the 529s. He’d been requested to move the UGMA’s to 529 which he just delayed while he was drying all of the accounts. </p>
<p>
</p>
<p>I disagree; if he was the legal owner of the UGMA assets, he could have clearly done whatever he wanted with them, and there wouldn’t even have been a case.</p>
<p>It’s actually an interesting situation in that the custodian actually has the assets in his own name for the benefit of the children without a whole lot of stipulation on the what the benefits are. Court ordered child support is not supposed to be included in there, but apparently other court ordered payments could be. These things have gone by the wayside for the most part, replaced by the 529s, but abuse of them can also happen. This guy spend the 529s on himself, got a masters for himself, and then paid for some family member’s kids, for what is suspected a kick back, so that he pocketed a nice piece of that as well. In this particular divorce, every single thing was a case, as this man was determined to pay absolutely as little as he could and to make it as painful as possible for his ex. He actually would tell his attorney to give his ex $30K of trouble any way possible. He was happy to pay that just to torture her. And he did. </p>
<p>I know this is really off-topic, @cptofthehouse but I’m curious about the kids who were affected by this terrible situation. I believe you said that they did finish college. Are they successfully launched and keeping their excuse for a dad out of their lives?</p>
<p>The daughter is doing very well, the son ok, and they are with their dad, and sneak around to see their mom. He has millions and buys his time from the kids who have found it a lot easier to be with him. He can be a charming, wonderful and generous person, and will pour money into any thing he pleases. Both kids do sneak money to the mom, who is a friend of mine, but no, she is not faring as well. Unfortunately, money makes a big difference in life. His kids actually love him and always did, though they were upset with him at various times in all of this BUt he bought them each their car, and their homes, they now have kids of their own, and their own needs and a rich happy dad is easier to bear than a mother who is having financial issues, and needs help. He makes very little conditions about the money he gives the kids other than they can’t give it their mother, and he wants the mother out of their lives and the grandkids’ as much as possible. The one son stood up to him for a while and succumbed when he was having financial issues that Dad could wipe out very easily, which he did when he met the conditions. He has threatened to cut out of his will, the kids and grand kids if he finds out they are giving mom money, and the money he has would make a huge difference in their family lives. IT’s a very sad situation.</p>
<p>Wow!</p>
<p>^^ Frankly, although I think his case is a bit extreme, I can understand how he got to that point. I’m guessing that your friend (1) was the one who decided to end the marriage and leave him, not for abuse or infidelity or any such cause but simply because she decided she wasn’t happy like she “deserved” to be (well, people don’t get what they “deserve” – does anyone “deserve” to starve, or catch ebola, or get hit by a hurricane?) and wanted to have the exact same life - including his income - but without him in it, and (2) she litigated the case in court for years and years (which in her mind, he “deserved”?). That’s just a guess, but it’s the single most common tale of divorce in the US. </p>
<p>“But it involved court ordering payment of private school for the kids, and he was able to use the funds for that purpose.” This sounds perfectly kosher to me. Saying he drained the funds suggested he spent the money on himself, but this says otherwise.</p>
<p>“Both kids do sneak money to the mom,” well, I guess there’s a good reason for him to put conditions on what can be done with his money.</p>
<p>“but no, she is not faring as well.” And he should care… why? If he is aware of her present circumstances, he is probably thinking there is some irony in people suing to get what they “deserve”, and finding it’s not how they expected it to be.</p>
<p>You say he’s actually quite generous to his own children. Why would you call that “buying their love” instead of “being a good father”? Frankly, he sounds like a pretty nice guy to anyone who doesn’t drag him through the courts ad infinitum. </p>
<p>Here’s a (possible) explanation for his behavior, courtesy of Oliver Wendall Holmes: “Even a dog knows the difference between kicked and being stumbled over.” He got kicked, repeatedly, and he remembers.</p>