Uniform Gifts/Transfers to Minor Accounts

South Bay Credit Union offers Uniform Gift to Minors Accounts (UGMAs) and Uniform Transfer to Minors Accounts (UTMAs) which allow you to invest under a child’s name with an adult as custodian. For the most part, any adult can also be the custodian of the account. Please review California Uniform Transfer to Minors Act for details.


Unlimited Investments – There is no limit to the amount of money that can be invested in an UGMA or UTMA, so you can use it to cover a significant portion of your child’s college costs.

Tax Advantages – Because the first several hundred dollars of earnings are not taxed, and a child’s tax rate – 10% for most minors – is usually lower than an adult’s, UGMAs and UTMAs can produce significant tax benefits for your family. Please consult with your tax advisor.

Flexible Contributions – Any concerned adult – a grandparent, aunt, uncle, or godparent, for example – can establish an UGMA or UTMA.

Things to Consider

Assets Might Not Be Used for College – Once the child takes control of the account, the child may then use the money for purposes other than education – regardless of the custodian’s wishes.

May Reduce Financial Aid – If your family is applying for need-based financial aid, having an UGMA or UTMA may reduce the size of the package.

Using the Money – If the child begins college before reaching the age when the custodianship ends, money in an UGMA or UTMA can be used to pay higher education costs, as long as the custodian agrees. When the child reaches the age when custodianship terminates, however, he or she takes complete control of the assets and can use them for any purpose. When the account is still under the custodian’s control, withdrawals from an UGMA or UTMA can be used to pay for special expenses – those beyond the normal costs of living. The custodian must agree to these withdrawals, however, and they must be for the child’s benefit. There is no penalty if the proceeds are used to pay for non-educational expenses, regardless of the child’s age.

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