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Q.How do you set up a UTMA Custodial Account?
A.To establish a UTMA custodial account, the donor must appoint a custodian (trustee) and provide the name and social security number of the minor. The donor irrevocably gifts the money to the trust. The money then belongs to the minor but is controlled by the custodian until the minor reaches the age of trust termination. The age of trust termination is 18 to 21, depending on the state in which you reside.
It is important to title a UTMA account correctly. An "In Trust For" account, also known as a Totten Trust, is NOT an UTMA account. The proper way of titling a UTMA custodial account is "[Custodian's Name] as custodian for [Minor's Name] under the [Name of Minor's State of Residence] Uniform Transfer to Minors Act".
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