Practice Quiz

FINRA Series 6

Category - Series 6

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Which of the following statements regarding both a Uniform Gifts to Minors account (UGMA) and a Uniform Transfers to Minors account (UTMA) is false?
  1. There can be only one custodian named on the account.
  2. The account must be established in the name of one minor child only.
  3. Once established, the account is irrevocable.
  4. The assets must be re-registered in the minor child’s name when the child turns 18.
Explanation
Answer: D - The false statement regarding both a UGMA and a UTMA is that the assets must be re-registered in the minor child’s name when the child turns 18. The rule differs between the two types of accounts. The UGMA requires that the assets must be re-registered when the child reaches the “age of majority,” as defined by the state, and the definition differs among states. Under the UTMA, the transfer of the account can be delayed until the minor child has reached the age of 25.
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