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The Uniform Gifts to Minors Act (UGMA) is a set of rules under which adults can give to a minor via a custodial account in the minor's name. In some states, the UGMA has been superseded by the Uniform Transfers to Minors Act (UTMA)
A creative way for wealthier families to pay for their children’s college education involves transferring assets to children when they’re minors. Most states now allow such transfers under one or both of two federal laws: The Uniform Gifts to Minors Act, or UGMA, and the Uniform Transfers to Minors Act, known as UTMA. Transfers to minors are usually used to provide tax benefits to donors, but they can also be used to provide money for college.
What You Need to Know
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