What is a Unified Gift to Minors Act (UGMA) account?
A UGMA account, or in some states, a Uniform Transfer to Minors Act (UTMA) account, is a custodial account which allows parents to irrevocably give assets to a child for tax benefits and still maintain control of the assets while the child is young. The child does get full control when he or she reaches the age of majority (ages 18-21 depending on the state). It is an inexpensive and simple alternative to a trust.
