SIE practice questionmediumCustodial Accounts and Minor Rights
In a UGMA/UTMA custodial account, which statement is TRUE regarding the minor's rights?
- AThe minor can direct investment decisions at any age.
- BThe minor becomes the legal owner when reaching the age of majority.✓ Correct answer
- CThe custodian is not responsible for the investments.
- DThe account can be closed only with court approval.
Explanation
Why B — The minor becomes the legal owner when reaching the age of majority.
In a UGMA/UTMA custodial account, the minor becomes the legal owner when reaching the age of majority. Until then, the custodian manages the account for the minor's benefit. The minor does not direct investment decisions before majority, and the custodian remains responsible for the account.
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