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Claim Against UTMA Custodian For Taking Funds Filed Too Late

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Allan Levine thought it was a good idea to set aside some money for his young grandchildren, Derek and Danielle Levine, and so in 1987 he established investment accounts for them. He used a popular and easy way of setting aside the money—he created accounts under the Uniform Transfers to Minors Act, or UTMA, listing himself as custodian. Apparently, however, Mr. Levine did not understand that the UTMA accounts really belonged to his grandchildren.

In December, 1995, Mr. Levine withdrew almost $125,000 from the two accounts and placed the proceeds into his own living trust. That trust provided that it would benefit Mr. Levine for the rest of his life, and that it would go to his wife Karen Levine upon his death. In other words, Derek and Danielle Levine would no longer receive any portion of the money that had been set aside for them.

Mr. Levine died in 1999. Because he had established a living trust, there was no probate required—his entire estate passed directly to his widow. His granddaughter Danielle was 17 at the time of his death, and grandson Derek had just turned 18 four months earlier.

Eighteen months after Mr. Levine’s death his grandchildren sued his widow, claiming that they were entitled to a portion of the money she had received from their grandfather’s trust. She moved to dismiss, not because he had the right to withdraw money from the UTMA accounts but because state law bars suits filed more than one year after the death of the defendant, and the grandchildren’s claim was really against Mr. Levine’s estate. The trial judge dismissed the lawsuit.

The general rule is that the claim of a minor is not foreclosed while he or she is still a minor. Danielle Levine argued before the California Court of Appeals that she had filed her lawsuit less than one year after reaching her majority, and that she should be allowed to prove that her grandfather had breached his duty to her by taking back his gift. The Court of Appeals disagreed and allowed the dismissal to stand. Levine v. Levine, October 17, 2002.

Mr. Levine’s behavior was not all that uncommon. Parents and grandparents often set up UTMA accounts for their offspring, then later decide they want their money back. Had Derek and Danielle Levine filed their lawsuit against their grandfather before his death, or against his estate within one year after his death, they would probably have prevailed; the UTMA money was not Mr. Levine’s to do with as he pleased, even though he was still listed as custodian on the accounts.

Arizona, like California, has adopted the UTMA—and the rules are similar in Arizona. Some states (and some older accounts) may still refer to the predecessor to the UTMA—the Uniform Gifts to Minors Act or UGMA. The rules governing UGMA accounts will also be similar. Money set aside in a UTMA (or UGMA) account no longer belongs to the donor, even if he or she remains as custodian.

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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

Famous people's wills

Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.