How To Protect Your Children Financially in the Event of a Divorce

The Colorado Court of Appeals recently held that accounts set up under the Colorado Uniform Transfers to Minors Act (UTMA) belong to the children in the event the parents divorce. See In Re the Marriage of Nevedrova, 23CA1278. The Court ruled that if either or both parents create an account for a child under the UTMA and transfer marital funds into the account, neither spouse can claim those funds in the divorce as they are no longer deemed marital property. Rather, all funds in the account belong to the child.
Further, the creator of the UTMA account becomes the custodian of the account on behalf of the child, who is the beneficiary of the account. The custodian has a legal “fiduciary duty” to hold those funds for the benefit of the child identified on the account.
Pursuant to this Colorado Court of Appeals decision, creating a proper UTMA for your child during the marriage provides financial protection for the child if a divorce occurs. For more information about how to protect yourself, your children, and your assets in a divorce, call Bloch & Chapleau today to speak to one of our experienced family law attorneys.