Gifts to Minors Act

Author:Jeffrey Lehman, Shirelle Phelps
 
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Page 81

The Gifts to Minors Act has been enacted in every state (with only minor variations) that facilitates the management of money given to INFANTS.

Initially, in 1955 and 1956, thirteen states enacted a law called an Act Concerning Gifts of Securities to Minors. The New York Stock Exchange and the Association of Stock Exchange Firms sponsored the development of the law, to make it possible to donate shares of stock to children without the creation of a formal trust. The scope of the law was subsequently expanded to encompass all gifts to minors.

The law allows the individual giving the property to choose an adult in whom he or she has confidence to serve as custodian of the property for the infant. The custodian has authority to collect, hold, manage, invest, and reinvest the property.

The custodian may pay out some of the money for the child's support, if necessary, and must manage the funds reasonably. The custodian must maintain accurate records of transactions and pay over the property when the child reaches majority. A custodian is not permitted to use any of the money personally or for anyone else except the child, nor can the person commingle the property with his or her own.

A professional custodian, such as a trust company or an attorney serving as guardian of the property for the minor, can be remunerated out of the child's property. Such a custodian is, however, held...

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