Uniform Gift/Transfer To Minor Account
A Uniform Gift to Minors Act (UGMA) or Uniform Transfer to Minors Act (UTMA) account is established by an adult custodian on behalf of a minor. The minor child is the beneficiary of the investment account.
A UGMA account is suitable for an investor who:
- Wants to establish an investment account for his or her child (or other minor) and wants the investment "gift" to automatically transfer into the minor's possession at the age of majority
- Is willing to take on the responsibility as custodian of the account (or appoint a custodian) and manage the administration of the account and its investments
- Understands that the account is set up as a gift that cannot be taken back
A UTMA account is similar to a UGMA account except that transfer of assets in the account may be delayed by the custodian until the minor reaches the age of 21 (per Washington State Law, age of 25 in some other states)