Uniform Transfers To Minors Act - UTMA
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Definition of 'Uniform Transfers To Minors Act - UTMA'An act that allows a minor to receive gifts such as money, patents, royalties, real estate and fine art, without the aid of a guardian or trustee. Under UTMA, the gift giver or an appointed custodian manages the minor's account until the latter is of age (usually 18 or 21). The Uniform Transfer to Minors Act also shields the minor from tax consequences on the gifts (up to a specified value). |
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Investopedia explains 'Uniform Transfers To Minors Act - UTMA'Originally drafted in 1986 by The National Conference of Commissioners on Uniform State Laws, UTMA is an extension of The Uniform Gift to Minors Act (UMGA), which was limited to the transfer of securities. While UTMA is a great way to build a tax-free savings account for minor children, it should be noted that the assets will be counted as part of the custodian's taxable estate until the minor takes possession. UTMA assets might also work against a student seeking financial aid. |
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