SIE practice questioneasyUGMA/UTMA Accounts
Under UGMA/UTMA, who is the legal owner of assets in a custodial account?
- AThe broker-dealer firm
- BThe custodian (adult)
- CThe minor (child)✓ Correct answer
- DJointly held by the minor and the custodian
Explanation
Why C — The minor (child)
Under UGMA (Uniform Gifts to Minors Act) and UTMA (Uniform Transfers to Minors Act), the minor is the legal owner of the assets. The custodian manages the account on behalf of the minor until the minor reaches the age of majority (typically 18 or 21 depending on the state). Gifts to custodial accounts are irrevocable — the adult cannot take back the assets once contributed.
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