A donor may make an outright gift to a custodial account for the
benefit of a minor child. The parent or custodian may retain
responsibility of management of the assets in the account subject to
the terms of the act. The standard rules regarding gift tax exclusions
apply, including the annual $13,000 limit for tax year 2011. The donor may choose to
contribute from a number of assets, such as stocks, bonds, mutual funds
or real estate. The funds may be used for any purpose, including
education. One issue to consider with the UGMA and UTMA is that upon
reaching a certain age, specified by each state’s laws, the child has
full discretionary control over the accumulated assets and may choose
to use such assets for purposes other than college funding.