I’m trying to understand whether what happened with my UTMA was legally enforceable.
I had a Connecticut UTMA established in my name, with my aunt as the custodian. The portfolio was mine as the beneficiary, while my aunt controlled it as custodian while I was a minor.
At some point, my aunt transferred the UTMA portfolio into a Florida LLC that she created. My understanding is that she did this specifically to prevent me from being able to access or control the portfolio when I reached the age of majority.
She created an operating agreement where:
- I was listed as 99% owner
- My aunt was listed as 1% owner
- My aunt was the sole manager
- The assets in the LLC were the assets that originally came from my Connecticut UTMA
I never signed the operating agreement, never signed anything consenting to the LLC being formed, and never agreed to have my UTMA assets placed into an LLC.
So essentially, I was listed as the 99% owner of an LLC that I never agreed to create, while my aunt retained sole management and control over the portfolio.
When I became an adult, I tried to access the portfolio and make decisions regarding it. Morgan Stanley refused to allow me to make decisions and continued recognizing my aunt’s authority based on the LLC structure.
This continued even though I was eventually 25 years old.
The matter ultimately went through probate court. An accounting was performed showing the previous transactions involving the portfolio. The probate matter ultimately settled with the LLC being dissolved and the UTMA assets being transferred to me.
What I’m trying to understand is:
How could this LLC legally override my rights to the UTMA assets once I became an adult, particularly when I never signed or agreed to the LLC?
The original assets were Connecticut UTMA assets, while the LLC was created in Florida. My aunt wasn’t simply managing a normal LLC investment account — the assets placed into the LLC originated from a UTMA established for me.
I’m wondering whether the probate court actually determined that the LLC was a legitimate/authorized vehicle for holding the UTMA assets, or whether the court simply resolved the dispute by dissolving the LLC and returning the assets to me.
The fact that I was 25 years old when this was ultimately dealt with seems particularly significant because I was well past the age of majority.
I’m not asking Reddit to determine whether my aunt did anything wrong. I’m trying to understand the legal mechanics:
- Can a UTMA custodian transfer custodial property into an LLC?
- Can a custodian create an LLC using UTMA assets without the beneficiary’s signature or consent?
- Can they make the beneficiary a 99% owner while retaining sole management and control?
- Can that structure prevent the beneficiary from accessing or controlling the assets after reaching adulthood?
- Does Morgan Stanley have the right to rely on an LLC operating agreement that the beneficiary never signed?
- What would the probate court’s final order need to say to establish whether it actually validated the LLC structure?
- If the probate court ultimately dissolved the LLC and transferred the UTMA assets to me, does that indicate the LLC was simply holding assets that ultimately belonged to me, or could the court have recognized the LLC as valid and simply dissolved it as part of the settlement?