When do parents hold the financial hammer?

A boy gets a job while he's still in school, saves up some money, puts it in a savings account that is jointly held by one of his parents (as it almost always has to be, since minors almost always cannot enter contracts by themselves). The parent at some point withdraws the money because the parent finds out what the child will spend the money on, and doesn't like it.

Or parents set up a trust to hold assets for college expenses for one of their children. The child also funds the assets in the trust with earnings from a job. Later, the parents disallow distribution of the assets based on the child's career decision.

I recently got this comment on a well-discussed post on parents deciding not to pay for their children's college:

I started working at age 13 and my parents required that I save half my earnings “for education”. Unfortunately I was stupid enough to let them manage it for me. They invested it well, and the money grew, but when my choice of career path differed with what they planned for me I couldn’t get my hands on the money because it was in trust. So even though I’d earned the money I couldn’t get my hands on it unless I let them force me into a career path I hated. I eventually switched careers, left the country, and see them once or twice a year.

Granted, this is one side of the story, but on the face of it the commenter's parents appear to hold the hammer on the money.

In the case with joint bank accounts, both account holders have access to all of the funds at any time, so the parent taking all of the money was allowed, for better or for worse. For custodial accounts, it depends on how they were set up, but if the Uniform Transfers to Minors Act applies, then there are limitations on what the donor can do with that money. In other words, the child may have some recourse. (I don't know how the commenter's parents set up the trust, and I wouldn't comment on it specifically even if I did.)

I contributed a (pretty small) amount to my college education, and had the money in a joint savings account before I graduated high school. It never occurred to me that my parents could just take all of the money. It never occurred to me that they would.

It's unfortunate that disagreements go as far as it did with the commenter and the commenter's parents, but the potential exists wherever there is joint ownership or “veto power.” A few observations:

• Even if you have recourse as a minor, do you really want to sue your parents? Suing people tends to strain the relationship.
• Parents could be just taking the money, but parents also could be withholding the money with good reason, because they might see further down the road than the child does.
• If parents really are just taking the money, there are all sorts of consequences — tax, and possibly criminal — in addition to straining the relationship with their children.

I'm sure many disagreements could be headed off at the pass by (a) children honoring their father and mother and (b) parents not screwing over their children. I'm not saying that this necessarily happened here, but what if it did? How could this have been worked out? How could it still be worked out?