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Home » Asset Protection » How To Protect Gift Of Money To Child: Totten Trust Or Uniform Gift To Minors Account

How To Protect Gift Of Money To Child: Totten Trust Or Uniform Gift To Minors Account

ByJon Alper April 25, 2010May 22, 2020

A client established several years ago a bank account to save for his children’s education. The bank opened the account as a Totten Trust. The client said he knew his kids’ account was protected from judgment creditors because I had stated, somewhere on my website, that bank accounts established for children is exempt.

I responded that regardless of what he read the proper way to protect children’s money from your creditors is by setting up a bank account under the Uniform Gift to Minors Act (UTMA) rather than a Totten Trust.

A “Totten Trust” is a common law concept that refers to a financial account with money held in trust for another person. Some banks will open accounts for the benefit of other persons as Totten Trust. Florida law considers Totten Trusts to be revocable at will during the grantor’s lifetime. Because the grantor may rescind the trust and receive Totten Trust money, so can the grantor’s creditors capture same funds. Florida bankruptcy attorney Jordan Bublick posted a good explanation of Totten Trusts in his blog.

Uniform Gifts to Minors Act is explained in Florida Statute 710.11. A transfer of money to a UTMA account is irrevocable and is permanently vested in the minor children until the child has reached the age of 21 years. Because the grantor cannot reverse a transfer of money to a UTMA account and cannot access money in the account, neither can the grantor’s creditors. How do you set up a UTMA account at your bank? You ask for it !

Totten Trust accounts and UTMA accounts both involve money intended for minor children. The two types of accounts have different asset protection consequences. Don’t confuse them.

Last updated on May 22, 2020

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    • Asset Protection
      • Asset Protection Guide
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      • Equity Stripping
      • Exemptions
      • Florida Residency
      • Fraudulent Transfers
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      • UTMA Accounts
    • Business Planning
      • Business Entities
      • LLCs
      • LLC Operating Agreement
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    • Offshore Planning
      • Nevis LLC
      • Offshore Bank Accounts
      • Offshore Planning
      • Offshore Trusts
    • Judgment Collection
      • Judgment Collection
      • Bitcoin and Cryptocurrency
      • Deficiency Judgments
      • Fact Information Sheet
      • Head of Household
      • IRS Tax Debt
      • Not Paying Judgments
      • Statute of Limitations
      • Wage Garnishment
      • Writ of Garnishment
    • Wills and Trusts
      • Avoiding Probate
      • Estate Planning
      • Gun Trusts
      • Inheritance Tax
      • Irrevocable Trusts
      • Last Will and Testament
      • Living Trusts
      • Living Will
      • LGBT Estate Planning
      • Power of Attorney
      • Probate
      • Special Needs Trust
      • Trust Administration
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      • Attorney Fees
      • Chapter 7 Bankruptcy
      • Chapter 13 Bankruptcy
      • Dealing With Creditors
      • Involuntary Bankruptcy
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