A Delaware chancery court finds that the state Uniform Transfers to Minors Act does not prohibit the express delegation of the power to nominate a custodian for a gift of money. Weiss v. Weiss (Del. Ch. Ct., No. 1941-N, Feb. 15, 2007).
Gloria Weiss-Brown created an individual retirement account (IRA) through Wachovia Securities. The IRA beneficiary form provided that 50 percent of the proceeds would go to Ms. Weiss-Brown's grandchildren. However, if the grandchildren were under 21, the form provided that the personal representative of Ms. Weiss-Brown's estate should name a custodian to receive the distribution. When Ms. Weiss-Brown died, her personal representative named himself custodian of the money.
The children's father, Robert Weiss, sued the personal representative and Wachovia, claiming that that Ms. Weiss-Brown's delegation of her power to nominate a custodian was invalid because it was not specifically authorized under the Delaware Uniform Transfers to Minors Act (UTMA). Mr. Weiss asked for summary judgment.
The Chancery Court of Delaware denies summary judgment, holding that the Delaware UTMA did not prohibit Ms. Weiss-Brown from delegating the power to nominate a custodian. According to the court, the purpose of the statute '“ to create a convenient and inexpensive way to give money to a minor '“ is furthered by allowing individuals to expressly delegate the nominating of a custodian.
To download the full text of this decision in PDF format, go to https://courts.delaware.gov/opinions/(zn0lxubhmbc3mgmoiwovxv45)/download.aspx?ID=88140.
(If you do not have the free PDF reader installed on your computer, download it here.)
Did you know that the ElderLawAnswers database now contains summaries of more than 1,100 fully searchable elder law decisions dating back to 1993? To search the database, click here.
Subscribe to the Knowledge Bank.
