A UTMA — Uniform Transfers to Minors Act — savings account is a type of custodial account that an adult controls for the benefit of a minor. The adult, or custodian, manages the account, but the funds are owned by the minor. In Minnesota, the age of majority for UTMA accounts is 21. Minnesota state statutes deal with the death of a custodian prior to the minor reaching the age of majority.
UTMA accounts create provisions in which an adult can transfer assets to a minor without the necessity of a special trust account. Some types of assets that an adult can transfer into a UTMA account include money, real estate and securities. The minor gains control of the assets in the account upon reaching the age of majority, at which time the UTMA savings account is terminated.
The legal terms relating to the management of a UTMA savings account in Minnesota include transferor, custodian, successor custodian, conservator, personal representative and trust company. The transferor is the person who transfers the assets into the UTMA account. Custodian is the person designated to control the UTMA account and may be the transferor, an adult or a trust company. Successor custodian is the person or trust company designated to take over control of the account if the custodian resigns, dies or becomes incapacitated. A conservator is a person appointed by the court as a temporary, limited or general guardian for the minor. A minor’s personal representative can be an executor or special administrator of a person’s estate. Trust company can be a corporation, financial institution or other legal entity with general trust powers.
Minnesota state statute 527.38 specifies that any person designated as a custodian in a UTMA savings account may decline the custodianship by giving a valid disclaimer to the person who nominated him for the position or to the person's legal representative. Custodians may designate a trust company or another adult as a successor custodian in accordance with Minnesota state statute 527.24 by completing an instrument of designation. A custodian may resign via written notice to the minor if the minor is at least 14 years old. Management of the account then passes to a successor custodian.
Death of Custodian
If a UTMA savings account custodian dies before the minor is 21 years old, the designation of the successor instrument becomes effective. If the account custodian dies without designating a successor custodian, the minor may designate a successor custodian if the minor is at least 14 years old. Minnesota state statute 527.38 further states that if the minor is not yet 14 when the custodian dies or does not act to appoint a successor within 60 days, the conservator of the minor becomes the custodian of the account. If the minor’s conservator declines the position or if the minor has no conservator, an adult family member or another interested party may request that the court appoint a successor custodian.
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