Under the Uniform Transfers to Minors Act (UMTA), money deposited into a UTMA account cannot be withdrawn for any reason—except by the child at the appropriate age. In the United States, a child’s money does not belong to the child’s parents or guardians.

How do you dissolve a UTMA?

Unfortunately, a UTMA is an irrevocable account and legally belongs to your child. This means you cannot simply terminate it like you would a living trust or your own accounts.

How do I withdraw money from my custodial account?

While you can technically withdraw money from a custodial account before your child reaches the age of majority, you can only do so for the direct benefit of the child. That means any purchases must be to help your child, like buying new school clothes or braces.

How is money transferred to a UTMA account?

A Uniform Transfers to Minors Act, or UTMA, account is a way to transfer money to an investment account for a child without having to set up a legal trust. The accounts are established with an adult listed as the custodian for the benefit of a minor child. Any money placed into a UTMA account is the legal property of the beneficiary child.

How old do you have to be to release UTMA money?

One way or another, the minor can compel an accounting and release of the money when he or she reaches the appropriate age (18 or 21, depending on the state and circumstances).

Who is responsible for a minor’s UTMA account?

Under the UTMA, the gift giver or an appointed custodian manages the minor’s account until the latter is of age. The Act also shields the minor from tax consequences on the gifts, up to a specified value.

When does custodianship end on a UTMA account?

For example, if you transfer $50,000 to a UTMA account for your grandson Billy and name Billy’s uncle as the custodian, when Billy reaches a certain age, the custodianship will terminate and the funds will be distributed to Billy. The age is designated by the state statute where you set up the UTMA account.