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UGMA and UTMA Accounts
If you wish to give assets to a child without going through the complex process of setting up a trust, UGMA (Uniform Gift to Minors Act) and UTMA (Uniform Transfers to Minors Act) Accounts can benefit you. Both are excellent tools for transferring assets to minors because a custodian is appointed until a child reaches legal age and takes control of the account. 


Tax savings
Because UGMA and UTMA Accounts are taxed at a child’s rate, they can create considerable tax savings.  For children younger than age 19 and dependent, full-time students younger than 24, the first $950 of investment income is tax-free, and the next $950 is taxed at the child’s rate.  Investment income above $1,900 is taxed at the parents’ top rate.  For children older than age 19 (who are not dependent, full-time students) and for children older than 24, all investment income is taxed at the child's rate.

Anyone who would like to gift assets to a child may take advantage of a UGMA or UTMA Account. Though commonly used to set aside funds for college, withdrawals can be used for the general benefit of the minor.

Securities offered through MWA Financial Services Inc., a wholly owned subsidiary of Modern Woodmen of America, 1701 1st Avenue, Rock Island, IL 61201, 309-558-3100. Member: FINRA, SIPC. Products are available in most states. Individual representatives may not be licensed to sell all products.

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