Series 7 practice questioneasyAccount Types — UGMA/UTMA Custodial Accounts
Under the Uniform Gifts to Minors Act (UGMA), who has the authority to make investment decisions for the account?
- AThe minor
- BThe minor's school guidance counselor
- CAny family member of the minor
- DThe custodian named on the account✓ Correct answer
Explanation
Why D — The custodian named on the account
In a UGMA custodial account, the custodian has full authority to manage the assets and make investment decisions on behalf of the minor. The custodian has a fiduciary duty to manage the account in the minor's best interest. The minor has no authority to make decisions until reaching the age of majority.
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