Answer:
The child is the beneficial owner of the funds, but the custodian is the owner of the account. For compliance with the CIP regulation at 31 CFR 103 section 103.121, the custodian is your customer and you must obtain the requisite four items of identity information (name, street address, TIN and DOB) from the custodian. Of course you must also get the name and TIN of the minor for tax reporting purposes and to comply with FDIC regulations to provide for appropriate insurance coverage.
Looking at the account from a different perspective, what should you do if you get a levy naming the custodian? Since the custodian only holds the account in a fiduciary capacity, the funds in the account are not the custodian's property, and a levy naming the custodian can't reach the UTMA account.
First published on BankersOnline.com 1/12/09
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