What are the Differences Between UTMA and UGMA Accounts?

Uniform Gifts for Minors Act Accounts and Uniform Transfers to Minors Act accounts both protect assets from a child’s full control until reaching the age of majority in their state of residence.

Custodial accounts are typically used to save and invest for a minor in the hopes that they will use their funds in a productive way when they reach adulthood.

What is a Custodial Account?

A custodial account works by having a parent, guardian, or other custodian establish an account with a bank or broker offering these accounts. 

How Do Custodial Accounts Work?

UGMA (Uniform Gifts to Minors Act) accounts are custodial accounts typically set up by parents, guardians, grandparents or other relatives, who then serve as custodians for the child’s account until reaching the age of termination or majority in their particular state.

What is a Uniform Gifts to Minors Act Account (UGMA)?

UTMA accounts (Uniform Transfers to Minors Act) are also custodial accounts and are not limited to a specific dollar amount each year.

What is a Uniform Transfers to Minors Act Account (UTMA)?

Both UGMA and UTMA accounts are similar in that they are custodial accounts with assets held within them for the benefit of the minor.  They differ in two ways:

What is the Difference Between an UGMA and UTMA Account?

UTMA accounts can hold any type of property, meaning they can hold the above financial instruments and real estate and real property.

1. Types of Assets Held Within the Account

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