Definitions for "Uniform Gifts to Minors Act"
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.