The UTMA offers all States the expansive approach some of them had already taken and
makes a variety of other improvements over the UGMA. Under the UTMA, any kind of property,
real or personal, tangible or intangible, can be transferred to a custodian for the
benefit of a minor. Under UGMA, only gifts of cash or securities are permitted. The
UTMA covers not only outright gifts, but also other transfers, such as payment of
debts owed by a third party to a minor and transfers of property from trusts or estates.
In some cases the minor’s own assets can be transferred to an UTMA.
The UTMA incorporates the provisions of UGMA and broadens the scope of the law to
include not only gifts, but also transfers to minors. For clarity, UTMA will be used
in place of UGMA throughout this section. The UTMA is only effective in states that
have adopted it (as of this writing, only South Carolina and Vermont have not adopted
the UTMA) and each State may modify their UTMA statute. The instructions in this section
provide general guidance on the model Act and thus regional instructions and regional
program staff should be consulted when evaluating specific UTMA issues.