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What is the age of majority for UTMA accounts in California?
18
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.
What happens to UTMA when child turns 21?
When children reach the age of majority, the account can be transferred into their name only with custodian consent. Otherwise, they can remove the custodian from the account at the age of termination.
At what age do UTMA accounts transfer?
Understanding the Uniform Transfers to Minors Act (UTMA) The gifts are usually transferred when the minor reaches 18 or 21 years of age, although in some states it is possible to extend this to 25.
Can you open a UTMA for someone over 18?
Between the age of 18 and 25 (it varies by state) legal control of the account must be turned over to the beneficiary, who can then use the money for any purpose they choose.
Who pays taxes on an UTMA account?
Because money placed in an UGMA/UTMA account is owned by the child, earnings are generally taxed at the child’s—usually lower—tax rate, rather than the parent’s rate. For some families, this savings can be significant. Up to $1,050 in earnings tax-free. The next $1,050 is taxable at the child’s tax rate.
What is the difference between a UTMA and UGMA account?
UGMA stands for Uniform Gift to Minors Act, while UTMA stands for Uniform Transfer to Minors Act. UTMA allows for more maturity time before handing to it over to the beneficiary (up to 25 years), depending on the state, while the UGMA matures at 18 years.
Can parent take money out of UTMA account?
A parent can withdraw money from a UTMA account provided that they’re the custodian of the account, but the custodian can only spend the withdrawn funds on the minor’s behalf and for their benefit.
Is UTMA a good idea?
UGMA / UTMA accounts can be good for some things, bad for others. UTMA (Uniform Transfers to Minors Act) has replaced UGMA (Uniform Gifts to Minors Act) in most states. The main “upgrade” is greater flexibility – UGMAs only hold securities, UTMAs can hold securities and others assets, such as real estate.
Can you open a UTMA for a 19 year old?
UTMA account age of majority If you are a parent who wants to transfer property to your young child, you can open a type of custodial account called an UTMA account. Additionally, some states may allow you to further delay the age to 25 years old. You might keep this in mind when creating an estate plan.
Can you take money out of a UTMA account?
As the custodian of a UTMA/UGMA account, a parent can withdraw money whenever needed to benefit the child.