Gifts to Minors Act

Gifts to Minors Act

The Gifts to Minors Act has been enacted in every state (with only minor variations) that facilitates the management of money given to Infants.

Initially, in 1955 and 1956, thirteen states enacted a law called an Act Concerning Gifts of Securities to Minors. The New York Stock Exchange and the Association of Stock Exchange Firms sponsored the development of the law, to make it possible to donate shares of stock to children without the creation of a formal trust. The scope of the law was subsequently expanded to encompass all gifts to minors.

The law allows the individual giving the property to choose an adult in whom he or she has confidence to serve as custodian of the property for the infant. The custodian has authority to collect, hold, manage, invest, and reinvest the property.

The custodian may pay out some of the money for the child's support, if necessary, and must manage the funds reasonably. The custodian must maintain accurate records of transactions and pay over the property when the child reaches majority. A custodian is not permitted to use any of the money personally or for anyone else except the child, nor can the person commingle the property with his or her own.

A professional custodian, such as a trust company or an attorney serving as guardian of the property for the minor, can be remunerated out of the child's property. Such a custodian is, however, held to a higher standard of care in management of the property. Other business people who deal with the custodian in management of the property are not responsible for ascertaining that the custodian has authority to act.

When a custodian resigns, dies, or is removed from the position by court order, another custodian can be appointed as a successor. Before dying, a custodian can designate who his or her successor will be, or a court may appoint one. A petition to appoint a new custodian can be filed in court by the individual who initially made the gift, by an adult member of the child's family, by a guardian, or generally by the child if the child is over fourteen years of age.

The age of majority varies from one state to another. Within some states, the age of majority is not the same for all purposes, so it is necessary to check the Gifts to Minors Act in the state in which the child resides.

References in periodicals archive ?
ONE OF THE LEAST-COMPLICATED LONG-term methods of funding education for children is a gifting plan under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA).
The Uniform Gifts to Minors Act (UGMA), The Uniform Transfers to Minors Act (UTMA) Accounts, and Coverdell Education Savings Accounts (formerly known as Education IRAs) are just some of the traditional ways to fund college.
Another investment vehicle that can serve as a holiday gift is UGMA property, or the Uniform Gifts to Minors Act.
When investing in a child's name, setting up a custodial account under the Uniform Gifts to Minors Act (UGMA) is simple and inexpensive.
The Uniform Gifts to Minors Act (UGMA), called the Uniform Transfers to Minors Act (UTMA) in some states, is simply a way for minors to own securities.
Director Randy Erford and nationally recognized financial authority Terry Savage addressing state residents' questions about college funding-including information about prepaid tuition plans, college savings bonds, financial aid, college-savings plans, education IRAs and Unified Gifts to Minors Act (UGMA) accounts.
362) In many states, these laws conform to the Uniform Gifts to Minors Act (hereinafter UGMA), the Uniform Gift of securities to Minors Act, or the Uniform Transfers to minors Act (hereinafter UTMA).
529 accounts naming themselves as DB (or when Uniform Gifts to Minors Act and Uniform Transfers to Minors Act accounts set up such accounts for their minor beneficiaries) and subsequently change the DB, deeming the change of DB from the contributor to any other person to be a distribution to the contributor followed by a new contribution of the account balance by the contributor to a new Sec.
Consider Opening A Uniform Gifts To Minors Act (UGMA) Account: This is a custodial account opened in a child's name.
One well-known savings plan is the Uniformed Gifts to Minors Act, which ``we don't recommend, because it puts a limit of $500 a year a parent can deposit'' into a child's college savings, said Cari Kaye, a spokeswoman with Fidelity Investments.
A custodial account under the Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA).
You could set up a custodial account under the Uniform Gifts to Minors Act.