Custodian

• Appointment of a custodian is required to create the financial UTMA to hold gifts to minor children. In many cases, the custodian is the parent or guardian of the child, but the custodian can be any person or institution with the capacity to serve. The court does not appoint custodians under UTMA.
  
  

Duties

• The custodian has broad powers over the management of the UTMA gift property for the child. Investment management, record keeping, filing appropriate tax returns and general fiduciary duties apply to the custodian. The custodian also has the ability to distribute funds from the UTMA on the minor child's behalf, provided the distribution of funds is in the best interests of the child.
  
  

Termination

• A UTMA terminates when the minor child reaches the age of majority as defined by state law. In most states, the age of majority is 18 or 21. After the child attains the age of majority, the gift assets are under complete control of the child. The custodian cannot stop this process, even if he believes it is not in the best interests of the child to have possession of the funds.
  
  

Ask Your Banker

• Most banks and financial institutions are familiar with UTMAs, and many of them have preprinted forms available to establish the accounts. Ask your banker or financial adviser for advice when setting up a UTMA to ensure that all desired goals for use of the property are met.