The Uniform Transfers to Minors Act (UTMA), also referred to as the Transfers to Minors Act, is a legislation that permits adults to transfer property or funds to a minor. The adult has the option to select a custodian who will oversee the property and utilise the income for the benefit of the minor. This law, initially established in 1983 and later revised in 1986, has been adopted by the majority of states.
The Uniform Transfers to Minors Act (UTMA), also referred to as the Transfers to Minors Act, is a legal provision that enables the transfer of property to a minor. Under this act, a custodian is authorized to oversee investments and utilise the income generated from the property for the minor’s benefit. To illustrate, if a grandparent intends to gift money to their grandchild, they can transfer the funds to the child’s UTMA account. The custodian, who is typically a parent or guardian, can then manage the funds until the child attains a specific age, which is usually 18 or 21, depending on the state. The UTMA has been implemented in most states and underwent a revision in 1986. It was previously known as the Uniform Gifts to Minors Act or Gifts to Minors Act.
The UTMA is a law that allows a person to transfer assets to a minor without the need for a trust or guardianship.
Almost any type of asset can be transferred under the UTMA, including cash, stocks, bonds, real estate, and other property.
Any adult can make a transfer under the UTMA, including parents, grandparents, and other relatives.
The age limit for a minor under the UTMA varies by state, but it is typically 18 or 21 years old.
The transfer may be subject to gift tax, but the income generated by the transferred assets is generally taxed at the minor’s lower tax rate.
No, the transferred assets are held in a custodial account until the minor reaches the age limit.
No, the custodian has a fiduciary duty to manage the assets for the minor’s benefit.
Yes, the minor can use the transferred assets for any purpose once they reach the age limit.
The transferred assets become part of the minor’s estate and are distributed according to their will or state law.
No, the transfer is irrevocable once it has been made under the UTMA.
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.
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