Uniform Gift to Minors Account (UGMA)

This a law that allows for the transfer of financial assets to a minor without the time-consuming process that comes with setting up a formal trust. This enables the asset to be set aside for the benefit of a minor in the United States and may result in some income tax benefits for the child’s parents. A UGMA account is managed by an adult custodian until the minor beneficiary comes of age, at which point they assume control of the account. The assets become the child’s property when they reach adulthood (18 or 21 depending on the state), at which point they can be used for any purpose.