Answer:
Your states laws may or may not provide for the opening of an account for a minor. If there isn't a law providing for it, you do it unprotected from the fact that the minor can't enter into a binding contract, and can walk away from the deposit contract at will, without consequence. So make sure you know what your state's laws say on the subject.
Every state but one has its version of the Uniform Transfers to Minors Act (one state still gets by with the older Uniform Gifts to Minors Act). The law of the state creates the fiduciary relationship when the custodian accepts a transfer for the benefit of the minor.
Neither account creates an extra duty to monitor account activity, but a bank faced with knowledge that a transaction in a UTMA account is a breach of the custodian's fiduciary duty, should act on that knowledge. It would be wrong for the bank, for example, to accept a pledge of the account against a loan for the custodian as an individual.
First published on BankersOnline.com 4/2/12
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