Yes, a minor can receive gifts or assets without a guardian or trustee, as it is stipulated in the Uniform Transfers to Minors Act. The UTMA is a law that governs the transfer of assets from adults to minors. It provides parents and other adults with a tax-advantaged<\/a> way to pass on gifts to minors without needing to create a formal trust. In doing so, the adult who donates the gift would typically act as the custodian for those assets until the minor reaches legal age. Alternatively, the donor can also appoint a third party to serve as the custodian of those assets.<\/span><\/p>"
}
}
,
{
"@type": "Question",
"name": "What Is the Difference Between the UTMA and the Uniform Gifts to Minors Act (UGMA)?",
"acceptedAnswer": {
"@type": "Answer",
"text": " The UTMA and the UGMA serve similar purposes, but there are important differences between them. Most notably, the UTMA allows for a broader range of assets to be gifted<\/a>, including patents, royalties, real estate, and art.<\/span><\/p> The UTMA also provides additional time for the assets being gifted to reach their maturity dates, such as in the case of a bond. By contrast, the UGMA requires the assets to be assumed by the minor once the minor reaches 18 years of age.<\/p>"
}
}
,
{
"@type": "Question",
"name": "What Are the Pros and Cons of Using a UTMA Account?",
"acceptedAnswer": {
"@type": "Answer",
"text": " The main advantage of using a UTMA account is that the money contributed to the account is exempt from paying a gift tax of up to a maximum of $19,000 per year for 2025.<\/span> Any income earned on the contributed funds is taxed at the tax rate of the minor who is being gifted the funds. Since the minor’s income is presumably significantly lower than that of the adult donor, this can lead to significant tax savings.<\/span><\/p> One of the drawbacks of using a UTMA account, however, is that it can make the recipient less eligible for need-based college scholarship programs and other such initiatives.<\/span><\/p>"
}
}
,
{
"@type": "Question",
"name": "When Can a Child Claim Ownership of an UTMA Account?",
"acceptedAnswer": {
"@type": "Answer",
"text": " Depending on the state, a UTMA account is handed over to a child when they reach either age 18 or age 21. In some jurisdictions, at age 18 a UTMA account can only be handed over with the custodian’s permission, and at 21 is transferred automatically. Inquire with the bank or brokerage where the UTMA is housed for clarification.<\/p>"
}
}
]
} ] }
]