UK Accounting Glossary
The Uniform Gift to Minors Act creates a custodial vehicle by which anyone can transfer assets to a minor without forming a trust. A Uniform Gift to Minors Act account can be set up through a financial institution such as a bank, and assets in a Uniform Gift to Minors Act account may include stocks, bonds, mutual funds, savings accounts, and life insurance. Contributions to a Uniform Gift to Minors Act account are considered gifts, and any earnings from a Uniform Gift to Minors Act account are reported to the IRS under the minor’s social security number. According to the Uniform Gift to Minors Act, a custodian is appointed to manage a Uniform Gift to Minors Act account and he or she is required to make responsible investment decisions. When a minor becomes a legal adult (18 or 21 in most states) he or she may take control of his or her Uniform Gift to Minors Act account. The Uniform Transfer to Minors Act (UTMA) creates a similar vehicle that replaces the Uniform Gift to Minors Act in some states.
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This glossary post was last updated: 5th February 2020.