As parents and grandparents, we want our children and grandchildren to have a successful and secure future. We strive to give them the best opportunities, whether it’s through education, experiences, or financial stability.
One effective way to provide for their future is through the Illinois Uniform Transfers to Minors Act (UTMA). This legal framework allows you to make gifts to minors in a way that secures their financial future.
Metz & Jones, LLC is here to help make that happen. Schedule your consultation with our firm now to see how we can set your family up for financial success.
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What Is The Illinois Uniform Transfers To Minors Act?
The Illinois Uniform Transfers to Minors Act (UTMA) is a law that transfers financial gifts to minors. It provides a simple method for transferring property, money, and assets to a child.
In the United States, transitioning into adulthood signifies that a minor has reached the age of majority. In Illinois, this means that the child has to reach the age of 21.
A custodian must protect and care for the property under the UTMA until the child turns 21.
What Is The Illinois Uniform Transfers To Minors Act?
The Illinois Uniform Transfers to Minors Act (UTMA) is a law that transfers financial gifts to minors. It provides a simple method for transferring property, money, and assets to a child.
In the United States, transitioning into adulthood signifies that a minor has reached the age of majority. In Illinois, this means that the child has to reach the age of 21.
A custodian must protect and care for the property under the UTMA until the child turns 21.
Examples Of Gifts Acceptable Under This Act
The Illinois UTMA lets you transfer several different assets to a child. Here are some examples of acceptable gifts:
- Cash or bank accounts
- Stocks and bonds
- Real estate properties
- Life insurance policies
- Artwork or valuable collections
- Business interests
- Mutual funds
Through the use of UTMA, it is possible to effectively manage these assets.
Real Estate Under the UTMA
Illinois UTMA includes property as a gift.
In the case of real estate being transferred via UTMA, a custodian is appointed to oversee the property. It can become more valuable through upkeep and leasing. Rising property value makes this asset more valuable for the child who will receive it.
The UTMA allows a property owner to easily transfer their real estate to their child upon their death.
The custodian for the minor will manage the property according to the wishes of the grantor. They will make sure it remains a valuable asset until the minor is old enough to take full ownership. This method protects the minor’s future property and gives peace of mind to the owner.
What Is The Difference Between This & And A Trust Fund?
Both the UTMA and a trust fund aim to provide financial benefits to minors. There are distinct differences between the two, which include:
- Simplicity and Cost
a . The UTMA is simpler and less expensive to establish compared to a trust fund. Setting up a trust typically involves legal fees and ongoing administration costs. - Management and Control
a. Under the UTMA, the custodian has broad powers to manage the assets without court supervision. A trust fund may require a trustee who is subject to stricter fiduciary responsibilities and oversight. - Age of Termination
a. UTMA accounts generally terminate when the minor reaches the age of 21. Trusts can continue for a longer or shorter period of time. - Flexibility
a.Trusts offer more flexibility and control when it comes to timing. UTMA accounts automatically transfer to the minor at the age of majority.
Which Should You Choose?
Deciding between a UTMA account and a trust fund depends on your specific goals and circumstances. Here are a few considerations to help you decide:
- For simplicity and lower costs
- If you prefer a straightforward approach with minimal legal complexity, the UTMA is a suitable choice.
- For long-term control and flexibility
- Trust funds are more flexible and controlled compared to the UTMA.
- For specific financial planning needs
- Consider your overall financial plan and how these options fit into your strategy. Consulting with a lawyer can provide valuable guidance.
Schedule Your Consultation With Metz & Jones, LLC
At Metz & Jones, LLC, we understand the importance of securing your family’s future.
Our attorneys can help you determine the best approach for your situation. Whether it’s establishing a UTMA account or setting up a trust fund, we can and will help you.
Schedule a consultation with us today. Ensure that your loved ones are well-protected and set up for success.