A law adopted by many states that provides a method for giving irrevocable gifts to children while maintaining custodial control over the account. UGMA accounts are managed by you or some other custodian who acts on behalf of a minor. Eventually (at an age of 18 to 25, depending on the state) the assets have to be turned over to the child. See our article Investing for Kids.
A simplified law that enables minors to own property or securities in a beneficial fashion without need of trust instruments or other legal documents. Uniform Transfers to Minors Act is available in most states.
Legislation, adopted by most states, establishing rules for the administration and distribution of investment assets in a minor's name. Securities can usually be transferred from the account of a parent or other custodian into a Uniform Gifts to Minors Act account in the name of the child. (Note: Under tax reform any earned interest over $1,000 in the account of a child under 14 years of age will be taxed at the parents' higher tax rate. Consult your tax adviser for more information.) Unless otherwise stipulated, the child gains control of the assets upon reaching the legal age of majority or adulthood.
provides a simple and inexpensive method of making a gift to minors by means of a custodianship arrangement
A law adopted by many states to provide a simple method for giving irrevocable gifts to children via a custodial account without having to establish a formal trust.
Laws adopted by most states allowing an adult to contribute to a custodial account in a minor's name without having to establish a trust or name a legal guardian. A custodian acts on behalf of the minor, making all related investment decisions.
A law that permits a person ("donor") to register stock, bank accounts, or insurance in the name of another ("custodian") for the benefit of one who is at the time a minor ("beneficiary") without preparing a formal trust document. In effect, the trust document has been written into the law. In so doing, the donor makes an irrevocable gift of the property to the minor but the custodian holds, invests, reinvests, and applies the property for the benefit of the minor until his majority, at which time the property is turned over to the beneficiary. This is a simple, inexpensive way to make small gifts to a minor.
Adopted by most states, the act permits a parent or guardian to give cash or securities to a minor child.
An Act that governs the transfer and gifting of property to a minor as well as a custodian's responsibilities and duties concerning management of the property until the minor reaches the age of "majority." Applicable state law defines the age of majority for a minor.
A law enacted to provide a means of transferring property to a minor without the need for a formal trust and corresponding restrictions relating to guardianship of a minor's property. The donor appoints a custodian to manage the property which must be turned over to the minor after the age specified in the UGMA law of the state in which the gift was made.
Legislation that provides a tax-effective manner of transferring property to minors without the complications of trusts or guardianship restrictions.
The act that permits gifts of money and securities to be given to minors and allows adults to act as custodians for minors.
The act that established rules governing the purchase of securities for a minor. A gift to a minor is irrevocable and securities must be registered in the name of an adult as custodian for the minor. See also: Uniform Transfers to Minors Act.
The Uniform Gifts to Minors Act, commonly known as UGMA, is a United States act that allows assets such as securities to be held in the custodian's name for the benefit of the minor without an attorney needing to set up a special trust fund. This allows minors in the United States to have property set aside for their benefit, and may achieve some tax benefit for the child's parents. Once the child reaches the age of 18, the assets become the child's assets and they can use them for whatever purpose they choose.