The Uniform Transfers to Minors Act (TMA) in California is a legal provision that allows individuals to transfer assets to minors without the need to establish a trust. It provides a simple and efficient way to transfer property to a minor, ensuring it is managed and protected until the minor reaches the age of majority, which is typically 18 years old in California. The TMA allows for the transfer of a wide range of assets, including real estate, cash, stocks, bonds, and other investments. Under the TMA, the person making the transfer is known as the "custodian," and they manage the property on behalf of the minor until they come of age. The custodian has a fiduciary duty to act in the best interest of the minor and may use the assets for the minor's benefit, such as education, healthcare, or general support, while still maintaining the overall value and integrity of the assets. There are several types of transfers that can be made under the California TMA: 1. Property Transfers: The TMA allows for the transfer of various types of assets, including cash, securities, real estate, and other valuable items. 2. Custodial Accounts: A custodial account is created under the TMA, where the custodian manages the assets on behalf of the minor. The account remains in the control of the custodian until the minor reaches the age of majority. 3. Financial Management: The custodian is responsible for managing and investing the assets in the best interest of the minor. They have the authority to make financial decisions and are accountable for maintaining accurate records of all transactions. 4. Tax Considerations: Under the TMA, there may be tax implications for both the transferor and the minor. It is essential to consult with a tax professional to understand any potential tax consequences. 5. Age of Majority: In California, the age of majority is typically 18 years old. Once the minor reaches this age, they gain full control and ownership over the assets transferred to them under the TMA. In conclusion, the Uniform Transfers to Minors Act in California provides a simplified and structured way to transfer assets to minors. It allows for the management and protection of these assets until the minor reaches the age of majority. Understanding the different types of transfers and the implications associated with the TMA is crucial when utilizing this legal provision.
Uniform Transfers To Minors Act California
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FAQ
Transferring a UTMA account to a child is simple. You can do so with most financial or investment institutions. You can also consult a tax or business lawyer to help you set up the legal structure, although most financial institutions can do this for you.
The California Uniform Transfers to Minors Act (?CUTMA?) is a modernization of the Uniform Gift to Minors Act, and became effective in 1985. A gift made pursuant to CUTMA is held in custodianship until age 18 unless the gift specifies a termination age beyond 18, but not over 25 years of age.
In California, the ?age of majority? is 18 while the ?age of trust termination? is 21. As a result, custodians can establish UTMA accounts for a minor and specify that they wait until age 21 to gain control of the funds. Once the account is funded, it is common to invest the funds in stocks, bonds, mutual funds etc.
All states in Region IX have repealed the UGMA and adopted the UTMA: Arizona effective 09/30/88, California effective 01/01/85, Hawaii effective 07/01/85, and Nevada effective 07/01/85.
UTMA allows the property to be gifted to a minor without establishing a formal trust. The donor or a custodian manages the property for the minor's benefit until the minor reaches a certain age. Once the child reaches a specified age set by the state, the child will have full control over the property.
