Can a bank give the beneficiary on a custodial account a loan?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Can a bank give the beneficiary on a custodial account a loan?
I am the representative payee for someone’s social security benefits. This person is 35 but deemed not able to make financial decisions for themselves by the social security administration. When I became payee, my bank said that I needed to open a custodial account in order to deposit the checks. Last month they left the beneficiary for the checks open up a line of credit on the account, and they are now coming after me for the money. They now say the account isn’t a valid custodial account because I’m not her legal custodian. Can they come after me for the money?
Asked on September 26, 2011 under Bankruptcy Law, Ohio
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If there is a custodial account where you are the custodian for a bank account all decisions must be made by you concerning the account. It seems improper for the bank to allow the beneficiary to open up a line of credit as to the custodial account to draw from without your approval in writing.
I would speak to the branch manager about this situation and if you do not receive a satisfactory response, speak with his or her supervisor. You might also need to consult with an attorney familiar with banking law.
The bank cannot legally come after you for the money drawn by the beneficiary because you did not pull it out.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.