Uniform Transfers To Minors Act
Encyclopedia
The Uniform Transfers To Minors Act (UTTMA) is a uniform act
drafted and recommended by the National Conference of Commissioners on Uniform State Laws
in 1986, and subsequently enacted by most U.S. State
s, which provides a mechanism under which gifts can be made to a minor
without requiring the presence of an appointed guardian for the minor, and which satisfies the Internal Revenue Service
requirements for qualifying a gift of up to $13,000 for exclusion from the gift tax
. It is an extension of the Uniform Gifts to Minors Act
(UGMA).
The Act allows the donor of the gift to transfer title
to a custodian who will manage and invest the property until the minor reaches a certain age. The age is generally 21, but is different in some states (usually 18 in those cases). In the interim, the custodian can also make payments for the benefit of the minor out of the corpus of the gift.
The donor can serve as a custodian, rather than transferring the property to someone else to hold for the minor. However, the value of custodianship property is included in a donor’s gross estate if the donor dies while serving as the custodian.
Uniform Act
In the United States, a Uniform Act is a proposed state law drafted by the U.S. Uniform Law Commission and approved by its sponsor, the National Conference of Commissioners on Uniform State Laws ....
drafted and recommended by the National Conference of Commissioners on Uniform State Laws
National Conference of Commissioners on Uniform State Laws
The National Conference of Commissioners on Uniform State Laws is a non-profit, unincorporated association commonly referred to as the U.S. Uniform Law Commission. It consists of commissioners appointed by each state, the District of Columbia, the Commonwealth of Puerto Rico and the United States...
in 1986, and subsequently enacted by most U.S. State
U.S. state
A U.S. state is any one of the 50 federated states of the United States of America that share sovereignty with the federal government. Because of this shared sovereignty, an American is a citizen both of the federal entity and of his or her state of domicile. Four states use the official title of...
s, which provides a mechanism under which gifts can be made to a minor
Minor (law)
In law, a minor is a person under a certain age — the age of majority — which legally demarcates childhood from adulthood; the age depends upon jurisdiction and application, but is typically 18...
without requiring the presence of an appointed guardian for the minor, and which satisfies the Internal Revenue Service
Internal Revenue Service
The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...
requirements for qualifying a gift of up to $13,000 for exclusion from the gift tax
Gift tax
A gift tax is a tax imposed on the gratuitous transfer of ownership of property. The United States Internal Revenue Service says a gift is "Any transfer to an individual, either directly or indirectly, where full consideration is not received in return."When a taxable gift in the form of cash,...
. It is an extension of the Uniform Gifts to Minors Act
Uniform Gifts to Minors Act
The Uniform Gifts to Minors Act, commonly known as UGMA, is an act in some states of the United States that allows assets such as securities, where the donor has given up all possession and control, to be held in the custodian's name for the benefit of the minor without an attorney needing to set...
(UGMA).
The Act allows the donor of the gift to transfer title
Title (property)
Title is a legal term for a bundle of rights in a piece of property in which a party may own either a legal interest or an equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document that serves as evidence of ownership...
to a custodian who will manage and invest the property until the minor reaches a certain age. The age is generally 21, but is different in some states (usually 18 in those cases). In the interim, the custodian can also make payments for the benefit of the minor out of the corpus of the gift.
The donor can serve as a custodian, rather than transferring the property to someone else to hold for the minor. However, the value of custodianship property is included in a donor’s gross estate if the donor dies while serving as the custodian.