Key Takeaways
- Under the Uniform Transfers to Minors Act (UMTA), money deposited into a UTMA account cannot be withdrawn for any reason—except by the child at the appropriate age.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.
Who can close a UTMA account?
Termination under the UTMA is set at age 21, unless the creator of the account elected for the termination to be at age 18. The custodian is required under the law to deliver the funds to the owner upon the minor attaining the age of 21 years, or to the minor’s estate in the event of his death.
When can a parent cash out a UTMA or a UGMA?
Each state has adopted its own version of these accounts, but generally, beneficiaries can access their UGMA money at age 18 and UTMA cash at age 21. These accounts are popular ways to save for a child’s college costs. However, the parent or custodian does not have to use the money for education.
What happens if I want to cancel a UTMA?
Assets can be moved if it’s for the benefit of the child. Under the UTMA, gifts made to these accounts are irrevocable, so there’s no undoing them. The custodian, such as a parent, manages the account in the minor’s interest, but the minor automatically receives full control of the account when they reach their state’s age of majority. 1
How old do you have to be to open a UTMA account in California?
In California, the age limit is 18 – 25, (depending on if the minor goes to college or not) which means that a UTMA account established in California must end before the minor reaches age 18 – 25.
Can a beneficiary withdraw money from a UTMA account?
The custodian manages the investments in the account and takes appropriate withdrawals for the child’s expenses until the child reaches a majority age. Specific rules dictate when and for what purpose withdrawals can be taken from these custodial accounts. Any money placed into a UTMA account is the legal property of the beneficiary child.
