The Uniform Transfers to Minors Act applies to Trust Law in Michigan.
As we have previously discussed, a Minor Trust is a trust for a beneficiary who is a minor. The title is handled by the law firm and could contain provisions on whether the child will be able to get a hold of his finances and handle it on his own.
Generally, we believe that a minor trust is good as long as you can gauge your child’s maturity at a specific age.
The UTMA, however, felt like a contradictory act but the good thing is that we can establish what it is here in this article.
What is the UTMA?
The UTMA is the Uniform Transfers to Minors Act. It allows the property to be gifted to a minor without establishing a formal trust.
What does it mean?
When it is the UTMA that applies there is no need for a trust to be established. As long as the child reaches a specific age, the child will have full control of the property. In the meantime, the donor or the custodian of the property manages the property and takes care of it until the child reaches a specific age.
What benefits does the UTMA have?
The benefits of the UTMA include an exemption from federal taxes. Gifts to minors are exempted from paying taxes for gifts of up to $15,000 a year.
Do you suggest following the UTMA or establishing a Minor trust?
Most clients would ask about what we suggest. Of course, like most legal problems, we prefer to look at the circumstances of the client first since the law is meant to protect and cover every nook and cranny of an individual’s needs.
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The article that you have read is based on general applications of the law. It is not legal advice and it is not to be construed as any legal consultation with the firm. No client-attorney relationship is created when you read the articles we have provided.
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