What is the Minnesota Uniform Transfers to Minors Act and How Does it Work? What is an UTMA account?
The Minnesota Uniform Transfers to Minors Act or “UTMA”, the acronym often used to refer to it, is a state law that sets out how assets are transferred to minors in the absence of a will or, in the event the transfer was by a will but that will failed to specify what happens if a minor received it, how and when the minor will receive the asset. It was adopted based on recommendations made by the uniform law commission.
Upon the recommendation of the American Bar Association, in 1892 the National Conference of Commissioners on Uniform State Laws was established. The members are lawyers, chosen by the states, who meet to suggest uniform laws for adoption by the states. The thought is that in many areas of the law, uniformity among the states would help commerce. Once a uniform law is drafted by the body, it is submitted for consideration and possible adoption by the states. Minnesota’s Uniform Transfer’s to Minors Act was adopted by the legislature after submission to it by the Uniform Laws Commission.
The law specifies that whenever an asset is transferred to a minor either through a will, or by some other means – such as passing away without a will with a minor as the beneficiary - and it is not specified who should manage the asset for the minor, a judge will determine who the custodian of the asset is. So, for example, if you were to pass away without a will, a judge would determine who manages the assets you leave for your children.
The law also specifies that whenever an asset is transferred to a minor, either through a will, or by some other means, when the child will receive the asset. Currently, the minor will receive the asset either at age 18 or 21 depending on how the asset was given to the child.
In the event you were to pass away without a will, while your children are minors, a district court judge would decide who manages the assets you leave behind for your children, how those assets are managed for them, and they would receive them outright and unprotected at an age where they may not be able to fully manage it.
If you would like additional information on protecting the money you leave behind for your kids, visit our video tips page here.