Designation of Successor Custodian by Donor Pursuant to the Uniform Transfers to Minors Act
Definition and meaning
The Designation of Successor Custodian by Donor Pursuant to the Uniform Transfers to Minors Act is a legal document used to appoint a successor custodian for assets held for a minor under the Uniform Transfers to Minors Act (UTMA). This act allows a donor to transfer assets to a minor while specifying a custodian to manage those assets until the minor reaches a specified age.
The donor, who makes the custodial gift, can designate an individual as the custodian. If the original custodian can no longer serve due to death, resignation, or removal, this form allows for the appointment of a successor custodian.
How to complete a form
Completing the Designation of Successor Custodian by Donor involves several steps:
- Identify the transferor: Begin by filling in the name of the donor and their address.
- Detail the custodial gift: Provide a clear description of the property being transferred to the minor.
- Designate the original custodian: Fill in the name of the initially designated custodian responsible for managing the assets.
- Appoint a successor custodian: Name the individual who will take over custodial duties if needed.
- Sign and date the form: The transferor must sign the document, and it may require a witness signature as well.
Who should use this form
This form is suitable for individuals who wish to create a custodial gift for a minor under the provisions of the Uniform Transfers to Minors Act. It is particularly useful for:
- Parents or grandparents looking to manage a minor's inheritance.
- Guardians planning to secure assets for a child’s future.
- Any adult desiring to assist minors with financial gifts or investments.
Benefits of using this form online
Utilizing the Designation of Successor Custodian by Donor form online offers several advantages:
- Accessibility: Users can access and complete the form from any location at their convenience.
- Time-saving: Online forms eliminate the need to visit legal offices or wait for in-person appointments.
- Ease of use: Online platforms often provide guidance and examples to make filling out forms straightforward.
- Professional quality: Legal forms obtained online are typically drafted by licensed attorneys, ensuring they meet legal standards.
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FAQ
A custodial account will automatically close when the custodian releases the assets to the new adult. But the custodian has no authority to close a custodial account before then. A custodial account can only be transferred to another custodian on the child's behalf.
There is no ability to transfer a UGMA or UTMA account to another child or to change beneficiaries. You are not supposed to use a UTMA-529 or UGMA-529 account conversion to change the beneficiary either because that would equate to giving your child's money to someone else.
Every UTMA account has a designated custodian who can make withdrawals or cash in the account at any time. However, the cash can't be used for day-to-day expenses like groceries. It can be used for school outings, music lessons and other non-essentials that benefit the child.
Opening Custodial Account Whether more than one custodian can be listed on the account depends on state law and the policy of the individual bank. If two custodians are permitted, each will have authority to conduct transactions on the account, including withdrawals.
If a donor acting as the custodian dies before the account terminates, the account value will be included in the donor's estate for estate tax purposes. If a minor dies before the age of majority, a custodial account is considered part of the minor's estate and is distributed according to state law.
UTMA stands for the Uniform Transfers to Minors Act, which is the legal provision in many states that authorizes a custodian to hold assets on behalf of a minor child until the child reaches the age of majority -- typically either 18 or 21.
The Uniform Transfers to Minors Act (UTMA) allows an adult to transfer assets to a minor by opening a custodial account. This type of account is managed by an adult the custodian who holds onto the assets until the minor reaches a certain age, usually 18 or 21.
(A) Any person who is eighteen years of age or older or a trust company is eligible to become a successor custodian. A successor custodian has all the rights, powers, duties, and immunities of a custodian designated in a manner prescribed by sections 5814.01 to 5814.10 of the Revised Code.
