UGMA vs. UTMA accounts: What’s the difference? The Uniform Transfer to Minors Act (UTMA) is an expansion of the UGMA and allows the custodian to transfer any kind of property to the minor. In addition to the cash and securities permitted under UGMA, UTMAs can include risky assets and ...
All UGMA accounts are irrevocable. As such, once you transfer assets to the account, they become the property of the minor and are no longer yours.3This means that you can't change your mind, so once the transfer is complete, it's there for good. UGMAs can be used against the benefi...
(UGMA) or Uniform Transfer to Minors Act (UTMA). Benefits differ slightly across the two accounts. But, generally, if you open one of these accounts for a child in your life, you can make it a one-time gift or add to it on birthdays, holidays and other special milestones as they ...
Eligibility: A child does not need earned income for a UGMA. Some states allow UGMAs, some allow UTMAs and some allow both. A broker can determine whether your state allows you to open one for a beneficiary. Good to know: Unlike money in an education account, money put into a UGMA or...
The UGMA and UTMA provide a way to transfer property to a minor without the need for a formaltrust. They allowassetsto be managed by acustodianwho is appointed by the donor. The assets are then turned over to the minor when they become of legal age in the state where the gift was mad...
Custodial account.Here, the child is the account owner but the parent/guardian maintains control and oversight. You may see these accounts referred to as UTMA or UGMA, which stand for Uniform Transfer to Minors Act and Uniform Gifts to Minors Act, respectively. The child does not have access...
But perhaps Teresa wants to consolidate the funds by transferring them to another brokerage account she owns. Once you’re the legal owner of a UGMA or UTMA, you can do anything with the assets you wish. One consideration is whether you must sell your investments and transfer the cash procee...
There are two types of custodian accounts: Uniform Transfer to Minors Act accounts (UTMA) and Uniform Gift to Minors Act accounts (UGMA). Only financial assets like cash, stocks, and bonds can be invested into a UGMA account. UTMA accounts allow for other types of valuable assets like real...
Then, when you feel your adult child is ready for it, you can transfer the account to an account in your child's name. Or you could make your child the beneficiary of the account if you die or become incapacitated. With greater adult control comes higher taxes, though. You're taxed ...
UGMA/UTMA custodial account: Parents can contribute post-tax dollars to one of these accounts in a child's name, and it is an irrevocable gift to the minor. At the age of majority in their state (typically between 18 and 25, depending on the state), the assets transfer to the child....