Compliance Question of the Week

Mother has been named the social security representative payee for her son’s SSI checks. Father is custodian on a UTMA account for the son at the credit union. Can the credit union allow the mother to deposit the checks into the UTMA?

It is not a good idea for the mother to put the funds into an account she does not have access to.

The Social Security Administration (SSA) objects to a representative payee endorsing a negotiable instrument payable to them as representative payee, over to another person. The representative payee has a legal responsibility to provide for the needs of the minor and see that the benefits are used properly. Since a UTMA only allows one custodian, once the funds were deposited, the mother would no longer have access to them as the payee. Further, the SSA does not want the funds from social security to be mixed with other funds.

It is possible, however, for the representative payee to save and invest for the benefit of the beneficiary, but they must always be aware of asset restrictions determined by the SSA.

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Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Compliance News, NWCUA.