My ex-husband (divorced since 2023) is the custodian of our 21-year-old daughter's UTMA account. He is a very toxic person and right before I filed for divorce, he threatened our daughter and got in her face for trying to take her sister out of his bedroom when he was verbally disparaging me, their mother (he has a history of aggressive and hostile behavior / emotional abuse). He was in her face yelling at her and she put her hands up at shoulder height with her palm out, and he moved forward, so her hands touched his shoulders. He immediately started shouting that she was "trying to hit him" and he was going to call the police. My daughter left the house on foot (he took her car keys) stayed with her friend for about 3 weeks and then left for her freshman year of college. She only communicated with him by text in the beginning and he threatened not to pay for college. Finally at the last minute he relented and agreed to pay. Since her second semester of freshman year, she has not communicated with him at all.
A Pennsylvania UTMA account was established when she was born and he is the custodian. Throughout the years, contributions were made from his work bonus. He worked on Wall Street. There were also some contributions from her grandparents but most of the funding source was his job. The UTMA was always intended to be used for college tuition. He was involved in her college application process and even insisted on using a very costly (about $50k) college coach to assist in the application process, which was paid for from her UTMA account. She attends a top-25 ranked private research university and is a double major in Computer Science and Physics. She has always had a job in college (tutoring and babysitting) and is a very good student (As and Bs). She doesn't "party" (she has fun but she doesn't really drink and doesn't do drugs). In fact for her freshman year, she was always the sober driver. Long story short, she is a very responsible and high achieving kid.
Over this past summer, my ex moved her UTMA account from Vanguard to Fidelity and changed the age of majority to 25. She turned 21 this past fall. This effectively eliminated her ability to know what is going on with the account, since she has no account number and did not have an account established at Fidelity. They are giving her a hard time about opening an account without the account number. She was also told that the account is effectively locked until she is 25, so no one (not even her dad who is the custodian) can withdraw money from the account.
Two days ago, he sent her an email saying he will not pay her college tuition because "I have no contact with you so I cannot in good faith say that I am using the account in your best interest." He then went on to say that he will not pay her tuition unless she meets with him and that meeting will be on his terms.
This latest stunt of his is twofold; 1.) it is a control tactic to get her to have to be in his presence. He desperately wants a relationship with her, and is using her UTMA to force a meeting. 2.) he is mad that I took him to court to increase child support over the summer after he went back to work (he "retired" in 2023) and now has to pay more child support. I originally did not take alimony, and our minor daughter's support was very meager. Even his attorney told him he got a good deal. So now, he is punishing me by making it my obligation to pay her tuition.
Since the UTMA is in her name, she pays taxes on it and she cannot qualify for certain scholarships or "discounted tuition" because of the account. His assertion that paying for her tuition "is not in her best interest" because he has no contact with her is beyond stupid because if he were to pay tuition and she were no longer a student, the transfer would be blocked. She is in her junior year and so close to the finish line. He knows that when she graduates, he will not have anything to hold over her head.
My question is, what are her options to gain control of her account? I suggested finding an attorney, but what are the chances she can get the account turned over to her? What type of attorney should she use? Is his argument that her lack of contact is a valid reason not to pay her tuition from the UTMA account, when he knows full well that she is enrolled and doing great? I'm finding it difficult to get answers because I am finding that a lot of people are not really versed in UTMAs.
Dad has withheld UTMA account and refuses to pay tuition because of daughter's no-contact. What are her options?
byu/Overtherama inpersonalfinance
Posted by Overtherama
2 Comments
So the UTMA money is legally the money of the beneficiary. Most brokers are required to lock the account once the child is the age of majority to force the transfer. If you know which brokerage platform you use your child may be able to call and have your account transfer to their name without your husband‘s input.
This is unquestionably lawyer territory. Given that your ex is a Wall St type with knowledge of financial instruments, unraveling this won’t be simple or cheap, if possible at all.