Topic: Uniform Transfers to Minors Act
GIFTS TO CHILDREN UNDER THE UNIFORM TRANSFERS TO MINORS ACT; A REVISION
By Milton Babirak, JD, LLM | Babirak Carr, PC | Sterling, VA
People frequently want to make a gift to a minor child. Sometimes the donor wants to make that gift during the donor’s lifetime; sometimes at the donor’s death. There are several ways to make such a gift. One common and inexpensive way is to give the gift to the minor’s parent or other custodian and have the parent hold, manage and distribute the gift as the parent or guardian deems proper. This insures that the child does not waste the gift. The legal authority for such a gift is the Virginia Uniform Transfers to Minors Act. That Act allows the parent or guardian to hold the money until the child reaches eighteen or twenty-one, if twenty-one is specified on the UTMA account.
Easy and Inexpensive
Gifts of money or property under UTMA are easy and inexpensive to do. It can be as simple as setting up a bank account for the minor in the name of an adult as custodian of the child. You do not need a lawyer to do this. The bank will do it for you. The parent or custodian holds and controls the account until the child reaches 18 or 21.
Recent Revision of the UTMA
Effective July 1, 2019, the Commonwealth of Virginia revised the UTMA to age 25. This makes the UTMA a bit more useful because parents may feel more comfortable knowing their minor children will not get control of the gift until they reach 25. However, there are two important caveats to know about this revision: First, it only applies to gifts after July 1, 2019 and, second, if the UTMA gift is made to the age of 25, the donee must have the right to withdraw the custodial property, beginning 30 days before the 21st birthday and ending 30 days after the birthday, or, if later, 30 days after the custodian gives the donee written notice of the withdrawal right.