Definition of Uniform Transfer to Minors Act / UTMA
Uniform transfer to minors act is the legislation that has been adopted in certain states, in lieu of the Uniform Gift to Minors Act. UTMA allows the custodian to determine the age at which the assets become the property of the minor. The maximum age for transfer of ownership is 25.
Applying "Uniform Transfer to Minors Act / UTMA" to Securities Exams:
Minors can not own securities in their own names because minors can not enter into legally binding contracts. The conditions under which a security is bought or sold represents a legally biding contact. As such the securities must be held in the name of a nominal owner for the benefit of the minor.