How to Undo a UTMA - Part II (2024)

FAQs

Can you revoke UTMA? ›

The UTMA account belongs to the child, and the funds are irrevocable. You cannot close a UTMA account like your own account or a living trust.

No, a parent cannot take money out of a UTMA account. The assets remain under the control of the custodian until the minor reaches the majority age. At that time, all remaining funds in the account are turned over to the beneficiary, free from further court supervision or management.

Option 3: If you'd like to close the account and request a check for the funds. Complete the Custodial Account Beneficiary Distribution Form. Note: With this option, you may be subject to tax on capital gains.

If appointing a new custodian, the signature of the previous custodian, a death certifcate, or an offcial court document must be provided. If the former minor's legal name has changed, please provide the previous and new names where indicated.

Gifts made to UTMA accounts are irrevocable, so you can't change your mind and take them back. The custodian of the account, who may be the same person who created it or another adult relative, is required to manage it in the minor's interest.

Gifts are irrevocable: Contributions to a custodial account are considered irrevocable—meaning you can't get that money back—and funds can be withdrawn by the custodian only to pay for expenses that would directly benefit the child before the age of majority.

Although the custodian in these accounts invests and manages the account, only the minor can use or benefit from it — the account and assets within are irrevocable and considered property of the minor. This means that the minor is also responsible for paying taxes on any investment income earned.

Arguably, in states that have adopted the Act without any or any significant changes to the model language (including, for example, Georgia, Alabama, and Florida), no specific legal barrier exists under the Act that would prevent the custodian from transferring property from the UTMA custodial account to a separate ...

What Expenditures Are Proper? Can I use the account to buy a car for my child? Or to send the child to private school? Yes, you are allowed to use UTMA accounts for items included in a support obligation, regardless of what you read elsewhere.

What is the age of termination for UTMA? ›

Generally, transfers into a UGMA or UTMA account cannot be revoked; the transferred assets belong to the minor whose name is on the account. However, the custodian of the account oversees it until the minor gets to a certain age. The age varies by state, but it's normally 18 or 21.

In the case of Coverdell plans, withdrawals can only be made for the purposes of K-12 and higher education expenses. If you are the beneficiary of the custodial account, you can withdraw funds once you legally become an adult.

A custodian must open the account and manage the assets on behalf of the minor, but the assets in the account are the property of the minor. Custodians are typically parents, but technically can be anyone. Only one custodian and minor are allowed per custodial account.

A UTMA account allows the gift giver or an appointed custodian to manage the minor's account until the latter is of age.

Generally, when UTMA or UGMA accounts (UTMA/UGMA Accounts) are established, the beneficiary (a minor) becomes the owner of the property at the time of the gift; however, the custodian manages and invests the property on the beneficiary's behalf until the beneficiary reaches the age of majority, at which point the ...

As the custodian, you can withdraw money from a custodial account if you need to use it to pay for something that will benefit the minor. You can't take the money back yourself, or give it to someone else.

An option might be to transfer the funds from an existing custodial account into a trust for the benefit of the minor or young adult, such that the recipient does not receive a significant lump sum until a later age, such as age 25 or 30 or beyond.

Can I change my mind and take back assets after I've set up a custodial account? No. Money and assets deposited into a custodial account immediately and irrevocably become the property of the child. In other words, you can't take the assets back or give the assets to someone else.