Uniform Gift to Minors Act. 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. Thus, minors can have securities bought and money invested in their names, but the custodian is responsible for managing the funds in the account. The custodian has a fiduciary duty to manage the account prudently, but once the minor reaches the age of majority, he/she has complete rights to the funds in the account. The assets are the legal property of the minor, and the parent has no legal control over the uses of the proceeds of the account. All withdrawals from the account are taxed at the minor's rate. Putting money into a UGMA account can negatively impact the chances for financial aid, since financial aid officers weigh children's assets much more heavily than parents' assets.
Related information about UGMA:
- Uniform Gifts to Minors Act - Wikipedia, the free encyclopedia
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- Uniform Gifts to Minors Act (UGMA) Definition | Investopedia
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- Shifting Ugma Money to a 529: the Pros and Cons
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- Vanguard - saving for college - Vanguard UGMA/UTMA account
Custodial accounts under the Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) allow you to save on behalf of a child for education ...
- UGMA & UTMA Custodial Accounts for Minors
Free online guide to custodial accounts under the uniform transfers to minors or gifts to minors act (UTMA or UGMA).