Invest in a Child's Future

Let Us Help Walk You Through the Uniform Gifts and Transfers to Minors Act (UGMA/UTMA)

For assorted reasons, parents, grandparents, and others sometimes wish to transfer ownership of money to children. One way to do this is to establish a trust. The UGMA/UTMA provides an alternative to the trust that may be simpler and less expensive.

These accounts allow you to invest for a child while taking advantage of the child's potentially lower tax rate. An account can be established for a child under the Uniform Gift to Minors Act (UGMA) or the Uniform Transfer to Minors Act (UTMA), depending on the state in which you live. The transfers made to an account of this type are considered an irrevocable transfer to the minor in whose name the account is registered.

Though not specifically designed for college expenses, many people are using UGMA/UTMA accounts as an alternative way to save for college.

Open an Account

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Eligibility Requirement

  • Depending on the type of transfer provided in the UGMA/UTMA statute, UGMA/UTMA accounts can be established for any child under the applicable age (usually 18 or 21, but in some states it's 25).
  • An adult is designated as the custodian to manage the account for the benefit of the minor until the child reaches the age specified in the statute. Upon reaching that age, the custodian is responsible for distributing or transferring the funds to the minor. Custodians have certain powers and responsibilities under these laws and they should consult with legal counsel to understand their obligations with respect to the account.
  • No income restrictions exist. You may make gifts to a child's UGMA/UTMA account regardless of your income.
  • Anyone may make gifts to a child's UGMA/UTMA account.

MPC #111247 EXP. 06.12