In the
 United States Court of Appeals
              For the Seventh Circuit
                         ____________

No. 05-2764
R. DAVID BOYER, Chapter 7 Trustee,
                                             Plaintiff-Appellee,
                               v.

DIMITRIOS MICHAEL BELAVILAS, et al.,
                                       Defendants-Appellants.
                         ____________
       Appeal from the United States District Court for the
       Northern District of Indiana, Fort Wayne Division.
       No. 1:03-CV-480—Theresa L. Springmann, Judge.
                         ____________
  ARGUED DECEMBER 1, 2006—DECIDED JANUARY 5, 2007
                   ____________


 Before EASTERBROOK, Chief Judge, and RIPPLE and
MANION, Circuit Judges.
  EASTERBROOK, Chief Judge. Dimitrios Belavilas and his
wife Maria Belavilas each owned 50% of the stock in
D-Man, Inc. When that firm received about $370,000 in
insurance proceeds, Dimitrios and Maria deposited the
checks into custodial accounts (under the Uniform Trans-
fers to Minors Act) for their two children, Angelo and
Nickolas. Maria was the custodian who controlled these
accounts. Instead of using the money for the children’s
benefit, Maria soon transferred it to Gyros Express and
Vlako, Inc., entities that Dimirtios and Maria had formed
and controlled.
2                                              No. 05-2764

  Dimitrios then filed a bankruptcy petition. He claimed
that he had owned only 2% of D-Man and that the insur-
ance proceeds had come to only $2,000. When the Chapter
7 Trustee discovered the truth, he filed an adversary
proceeding under 11 U.S.C. §548 to undo these fraudulent
conveyances. Dimitrios and Maria maintained, however,
that the Trustee could not recover anything, because none
of the recipients is a transferee within the scope of 11
U.S.C. §550(a). The children, as minors, could not be
treated as transferees, they maintained, because minors
do not control UTMA accounts. And Maria could not be a
transferee because she was the funds’ custodian and had
no legal right to the money, and could not be directed to
return the money as custodian because the children’s
accounts were empty. In other words, Dimitrios and Maria
argued that a second unlawful transfer (the movement
of money from the UTMA accounts to Gyros Express
and Vlako) prevented redress of the first unlawful transfer
(the placement of D-Man’s funds in the children’s ac-
counts).
  Bankruptcy Judge Grant had none of this and entered
a judgment making Maria, Angelo, Nickolas, and Vlako
jointly and severally responsible for paying $183,130 to the
bankruptcy estate. (The rest of Dimitrios’s 50% share of
the insurance proceeds was to come from Dimitrios
himself, because he controlled the money in the Gyros
Express account.) District Judge Springmann affirmed.
Maria, Angelo, and Nickolas have appealed; Dimitrios,
Vlako, and Gyros Express have not. We infer that
Dimitrios and Maria have caused Vlako to re-transfer the
funds to hide them from creditors; otherwise the judgment
would have been satisfied by now, and Maria and the
children would have no remaining liability. (Dimitrios
has pleaded guilty to two counts of bankruptcy fraud and
is in prison.)
 Maria’s situation is straightforward. The initial transfer
was to the UTMA accounts; Maria was the custodian but
No. 05-2764                                                3

not the “transferee.” (One major difference between UTMA
custodial accounts and common-law trusts is that a
trustee acquires legal title to the assets, while title under
the UTMA vests in the beneficiary, though control re-
mains with an adult custodian under §§ 9 and 12, enacted
in Indiana as Ind. Code §30-2-8.5-24 and -27.) Section
550(a)(1) of the Bankruptcy Code allows recovery from “the
initial transferee of such transfer or the entity for whose
benefit such transfer was made”. The bankruptcy judge
did not commit a clear error in determining that Maria
is “the entity for whose benefit” the transfer to the UTMA
accounts was made. Maria demonstrated as much by
treating the funds as her own—for instead of devoting
the money exclusively to the children’s welfare, as the
UTMA requires, Maria routed most of the cash to Vlako.
The whole point of these maneuvers was to keep
Dimitrios’s share of the insurance proceeds out of his
creditors’ hands and devote it to the family’s benefit.
  If Maria had removed only 50% of the balances from the
UTMA accounts, she might have been able to demonstrate
that this was her share of the insurance money. (We say
“might” not only because D-Man was the insured en-
tity—shareholders cannot deal with corporate funds as if
they were their own money—but also because money is
fungible. Bills did not come color-coded for “Maria’s share”
and “Dimitrios’s share.”) But she exercised dominion over
all of the money, in despite of both the creditors’ rights
and those of the children under the UTMA. This was
quite enough to incur liability under the “benefit” clause
of §550(a)(1).
  Maria’s argument that the Trustee did not adopt this
theory until late in the litigation is unavailing. Pleadings
need not specify legal theories, see Bartholet v. Reishauer
A.G. (Zürich), 

(7th Cir. 1992), and courts
award the relief to which the prevailing party is entitled
even if the appropriate theory is not articulated until the
4                                               No. 05-2764

last minute. See Fed. R. Bankr. P. 7054(a) (incorporating
Fed. R. Civ. P. 54(c)); Chicago United Industries, Ltd. v.
Chicago, 

(7th Cir. 2006). Maria has not
identified any prejudice that the Trustee’s delay may
have caused; her appeals to the district court and this
court have enabled her to make all appropriate arguments
about the effect of the “benefit” clause in §550(a)(1).
  Making Angelo and Nickolas personally liable for the
balances that passed quickly through the UTMA accounts
is more problematic. They were “transferees” in the sense
that they (rather than Maria) were the legal owners, but
they lacked any effective control over the funds’ disposi-
tion. Section 13 of the UTMA gives the custodian com-
plete authority over the funds, subject to the fiduciary
duty imposed by §12 (a duty that Maria violated by
transferring the money to Gyros Express and Vlako).
Angelo and Nickolas rely on Bonded Financial Services,
Inc. v. European American Bank, 

(7th Cir.
1988), which held that a person who lacks authority to
control the disposition of funds cannot be an “initial
transferee” for the purpose of §550(a). The entity at issue
in Bonded Financial was a bank, which was legally
required to follow its client’s directions about how funds on
account should be used. The bank could not put the money
to its own purposes but had to follow orders. Angelo and
Nickolas, unlike the bank, were beneficial owners of the
money in the UTMA account, so Bonded Financial is not
dispositive. Still, the minors’ lack of control over the
custodian does make it hard to equate them with the
prototypical transferee. See also In re Baker & Getty
Financial Services, Inc., 

(6th Cir. 1992).
  Once again, however, recovery of a fraudulent convey-
ance is not limited to a “transferee”; it is enough if the
transfer is for a person’s benefit. Angelo and Nickolas
were—at least initially—beneficiaries of the money
No. 05-2764                                             5

transferred into the UTMA accounts. The problem is not
so much with the idea that minors can be “beneficiaries”
even though adults control the purse strings as it is with
the consequence of the bankruptcy court’s joint-and-
several-liability judgment. Debts attributable to actual
fraud cannot be discharged in bankruptcy, see 11 U.S.C.
§523(a)(2)(A), so Angelo and Nickolas may be stuck with
this obligation for life and must pay from income they
earn as adults, even though they never saw a penny of
the money from D-Man’s insurance and never had a
chance to prevent their parents’ financial chicanery. (We
say “may be stuck” rather than “would be stuck” because
the effect of §523(a)(2)(A) on multi-party money shuffling
with intent to defraud a creditor was reserved in
McClellan v. Cantrell, 

(7th Cir. 2000).)
  Although no case that we have been able to find ad-
dresses how preference recovery under §550 relates to
minors’ custodial accounts, §17(c) of the UTMA addresses
the problem of lifetime liability arising from events a
minor cannot control: “A minor is not personally liable
for an obligation arising from ownership of custodial
property or for a tort committed during the custodian-
ship unless the minor is personally at fault.” The chil-
dren’s obligation to return the fraudulent conveyance is
one “arising from ownership of custodial property”. Unless
a minor is “at fault”—and the bankruptcy judge held
that neither Angelo nor Nickolas bears any fault—all
obligations that relate to the UTMA account must be
satisfied either from the custodial assets under §17(a) or
by the custodian. Maria is personally liable on account
of her personal misconduct; that much was settled above.
The obligations of Angelo and Nickolas are limited to the
custodial property under §17(a). This means all of the
custodial funds—not only what came from Dimitrios’s
50% of D-Man but also what came from Maria’s share.
Maria’s obligation to repay what she and her husband
6                                             No. 05-2764

jointly stole from their creditors must be satisfied before
anything may be left sheltering for the children’s benefit.
So if any money is retrieved from Vlako (or wherever it
has gone from there), Maria and the children must satisfy
the judgment before they can restore anything to the
UTMA accounts.
  The judgment is modified to provide that Angelo and
Nickolas are not personally liable, and that their obliga-
tions are limited to funds in or traceable to the custodial
accounts. As so modified the judgment is affirmed.

A true Copy:
      Teste:

                       ________________________________
                       Clerk of the United States Court of
                         Appeals for the Seventh Circuit




                   USCA-02-C-0072—1-5-07