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Simple English definitions for legal terms
Gifts to Minors Act
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A quick definition of Gifts to Minors Act:
The Gifts to Minors Act is a law that allows adults to give property or money to children. The Uniform Transfers to Minors Act is a newer version of this law that most states have adopted. It lets a person called a custodian manage the property and use the money to take care of the child. This law used to be called the Uniform Gifts to Minors Act or just Gifts to Minors Act.
A more thorough explanation:
The Gifts to Minors Act is also known as the Uniform Transfers to Minors Act (UTMA). It is a law that allows adults to give money or property to a minor, and appoint a custodian to manage it until the minor reaches a certain age.
For example, if a grandparent wants to give their grandchild $10,000, they can do so under the Gifts to Minors Act. They would appoint a custodian, such as the child's parent, to manage the money until the child turns 18 or 21, depending on the state.
The custodian has a fiduciary duty to manage the money or property in the best interest of the minor. They can invest the money and use the income to support the minor's needs, such as education or healthcare expenses.
The Gifts to Minors Act has been adopted in most states and was revised in 1986. It used to be called the Uniform Gifts to Minors Act, but the name was changed to better reflect its purpose.