Dear Len & Rosie, I am the custodian for a $55,000 Uniform Transfers to Minors Act account for my 16-year-old daughter that was given to her by her now-deceased grandparents. My daughter is supposed to use it to pay for her education. But at this point in time, she wants to buy a car, move into an apartment on her own, and, no doubt, party until the cows come home.

I want to move as much of this money into an account that she cannot access when she turns 18. I’ve done some research and it appears that I can use the money for expenses such as education, camp, her car, medical expenses, and even general living expenses. My plan is to keep about $10,000 to reimburse myself for the car I bought her and her medical bills, and to put the rest into a savings account in my name to distribute to her as I feel appropriate.

Are there any time limits on how far in the past I can retrieve funds for reimbursement and stay within legal boundaries of the use of this fund? -- Pat

Dear Pat, As your daughter’s custodian under the Uniform Transfers to Minors Act, you owe her a duty to hold the money and spend it for her benefit until she turns 18. Her grandparents could have directed you to hold your daughter’s money until her 25th birthday, but they didn’t do that and it’s too late to change it now. It’s her money, not yours. She is legally entitled to what hasn’t been spent on her before she’s 18.

Because your daughter is at least 14 years old, she has the right to inspect the books and see what you’ve done with her money. She can even petition the court to make you provide her with an accounting. What this means is that if your daughter gets mad enough at you, she will have a legal remedy against you.

You can pay yourself reasonable compensation for your services as custodian, but your right to compensation is not cumulative. You cannot pay yourself retroactively, and you could not really justify taking a fee of more than about one percent per year.

You also have to pay income tax on any fee you pay yourself. Furthermore, you cannot rightfully reimburse yourself for your own money you have already spent on her. The UTMA account does not relieve you of the duty of support you owe to your daughter as her parent.

On the other hand, there’s something to be said for ignoring the law and taking steps to protect your daughter from herself. There are not many people who would blame you for keeping the money if your daughter was just going to spend it on drugs. Just keep in mind that if you do this, you will be violating the law. If your daughter takes you to court to enforce her rights, you will lose. You do not have the right to withhold your daughter’s inheritance, even if you believe it’s in her best interests.

It’s water under the bridge for you, but readers who create their estate plans now should consider a sprinkling trust for grandchildren and other under-age beneficiaries.

The trustee of a sprinkling trust can have much more flexibility in how and when to distribute money to young beneficiaries who may not be responsible enough to be entrusted with their own inheritance.

Len Tillem and Rosie McNichol are elder law attorneys. Contact them at 846 Broadway, Sonoma, CA 95476, 996-4505.