The Gifts to Minors Act is a law that permits adults to transfer property or money to children. The Uniform Transfers to Minors Act is a more recent iteration of this law that has been adopted by most states. It allows for a custodian to oversee the property and utilise the funds for the benefit of the child. This law was previously known as the Uniform Gifts to Minors Act or simply Gifts to Minors Act.
The Gifts to Minors Act, also known as the Uniform Transfers to Minors Act (UTMA), is a law that enables adults to give money or property to a minor and designate a custodian to manage it until the minor reaches a specific age. For instance, if a grandparent wishes to gift their grandchild $10,000, they can do so under the Gifts to Minors Act. They would select a custodian, such as the child’s parent, to oversee the funds until the child turns 18 or 21, depending on the state’s regulations. The custodian is responsible for managing the money or property in the minor’s best interest, with a fiduciary duty. They can invest the funds and utilise the income to support the minor’s needs, such as education or healthcare expenses. The Gifts to Minors Act has been adopted in the majority of states and underwent revision in 1986. Previously known as the Uniform Gifts to Minors Act, the name was changed to better align with its purpose.
The Gifts to Minors Act is a legal provision that allows individuals to make gifts to minors, typically those under the age of 18, without the need for a formal trust or guardianship arrangement.
The act allows for the gifting of various types of assets, including cash, securities, real estate, and other valuable property.
Any individual, such as a family member or friend, can make gifts to minors under this act.
Yes, there are limits on the value of gifts. Each state may have different limits, but generally, the act allows for gifts up to a certain amount per year without incurring gift tax consequences.
The gifted assets are typically held in a custodial account until the minor reaches the age of majority, at which point they can use the assets for any purpose.
In some cases, the minor may be able to access a portion of the gifted assets before reaching the age of majority, but this would depend on the specific state laws and the terms of the custodial account.
No, once the gift is made under the Gifts to Minors Act, the donor relinquishes control over the assets, and they are managed by a custodian until the minor reaches the age of majority.
No, the custodian has a fiduciary duty to manage the assets solely for the benefit of the minor.
In some cases, the minor may have the ability to refuse the gifted assets, but this would depend on the specific state laws and the circumstances surrounding the gift.
While the act allows for certain tax advantages, such as the annual gift tax exclusion, it is advisable to consult with a tax professional to understand the specific tax implications based on individual circumstances.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/gifts-to-minors-act/
- Modern Language Association (MLA):Gifts To Minors Act. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/gifts-to-minors-act/.
- Chicago Manual of Style (CMS):Gifts To Minors Act. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/gifts-to-minors-act/ (accessed: May 09 2024).
- American Psychological Association (APA):Gifts To Minors Act. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/gifts-to-minors-act/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts