Uniform Transfers to Minors Act

Division 4, Part 9 deals with the UTMA. Section 3900 names this part the “California Uniform Transfers to Minors Act.”

Section 3901 defines the following terms: “adult,” “benefit plan,” “broker,” “conservator,” “court,” “custodial property,” “custodian,” “financial institution,” “legal representative,” “member of the minor’s family,” “minor,” “person,” “personal representative,” “state,” “transfer,” “transferor,” and “trust company.”

Section 3902 provides that this part applies to a transfer that refers to this part in the designation by which the transfer is made if at the time of the transfer, the transferor, the minor, or the custodian is a resident of this state or the custodial property is located in this state. The custodianship created remains subject to this part despite a subsequent change in residence of a transferor, the minor, or the custodian, or the removal of custodial property from this state.

Section 3903 states that a person having the right to designate the recipient of property transferable upon the occurrence of a future event may revocably nominate a custodian to receive the property for a minor beneficiary upon the occurrence of the event by naming the custodian followed in substance by the words specified in this section.

Section 3904 allows a person to make a transfer by irrevocable gift to, or the irrevocable exercise of a power of appointment in favor of, a custodian for the benefit of a minor.

Section 3905 states that a personal representative or trustee may make an irrevocable transfer to a custodian for the benefit of a minor as authorized in the governing will or trust. If the testator or settlor has nominated a custodian to receive the custodial property, the transfer is to be made to that person.

Section 3906 allows a personal representative or trustee to make an irrevocable transfer to another adult or trust company as custodian for the benefit of a minor in the absence of a will or under a will or trust that does not contain an authorization to do so. A transfer may be made only if all of the specified requirements are satisfied.

Section 3907 provides that a person who holds property of, or owes a liquidated debt to, a minor not having a conservator may make an irrevocable transfer to a custodian for the benefit of the minor. If a person having the right to do so has nominated a custodian under that section to receive the custodial property, the transfer must be made to that person.

Section 3908 states that a written acknowledgment of delivery by a custodian constitutes a sufficient receipt and discharge for custodial property transferred to the custodian pursuant to this part.

Section 3909 explains that custodial property is created and a transfer is made whenever any of the specified actions occurs.

Section 3910 specifies that a transfer may be made only for one minor, and only one person may be the custodian. All custodial property held under this part by the same custodian for the benefit of the same minor constitutes a single custodianship.

Section 3911 states that the validity of a transfer made in a manner prescribed in this part is not affected by any of the three specified conditions. A transfer is irrevocable, and the custodial property is indefeasibly vested in the minor, but the custodian has all the rights, powers, duties, and authority provided in this part, and neither the minor nor the minor’s legal representative has any right, power, duty, or authority with respect to the custodial property except as provided in this part.

Section 3912 requires a custodian to do three specified tasks. In dealing with custodial property, a custodian is required to observe the standard of care that would be observed by a prudent person dealing with property of another and is not limited by any other statute restricting investments by fiduciaries except that does either of two specified actions.

Section 3913 states that a custodian, acting in a custodial capacity, has all the rights, powers, and authority over custodial property that unmarried adult owners have over their own property, but a custodian may exercise those rights, powers, and authority in that capacity only.

Section 3914 allows a custodian to deliver or pay to the minor or expend for the minor’s benefit as much of the custodial property as the custodian considers advisable for the use and benefit of the minor, without court order and other duties. On petition of an interested person or the minor if the minor has attained the age of 14 years, the court may order the custodian to deliver or pay to the minor or expend for the minor’s benefit so much of the custodial property as the court considers advisable for the use and benefit of the minor.

Section 3915 provides that a custodian is entitled to reimbursement from custodial property for reasonable expenses incurred in the performance of the custodian’s duties. A custodian need not give a bond.

Section 3916 states that a third person in good faith and without court order may act on the instructions of, or otherwise deal with, any person purporting to make a transfer or purporting to act in the capacity of a custodian and, in the absence of knowledge, is not responsible for determining any of four specified activities.

Section 3917 explains that a claim based on a contract entered into by a custodian acting in a custodial capacity, an obligation arising from the ownership or control of custodial property, or a tort committed during the custodianship, may be asserted against the custodial property by proceeding against the custodian in the custodial capacity, whether or not the custodian or the minor is personally liable therefor. A custodian is not personally liable for either of two specified actions.

Section 3918 states that a person nominated or designated as custodian may decline to serve by delivering a valid disclaimer to the person who made the nomination or to the transferor or the transferor’s legal representative. If the event giving rise to a transfer has not occurred and no substitute custodian able, willing, and eligible to serve was nominated, the person who made the nomination may nominate a substitute custodian.

A custodian at any time may designate a trust company or an adult other than a transferor as successor custodian by executing and dating an instrument of designation before a subscribing witness other than the successor. If the instrument of designation does not contain or is not accompanied by the resignation of the custodian, the designation of the successor does not take effect until the custodian resigns, dies, becomes incapacitated, or is removed.

Section 3919 provides that a minor who has attained the age of 14 years, the minor’s guardian of the person or legal representative, an adult member of the minor’s family, a transferor, or a transferor’s legal representative may petition the court for specified purposes. A successor custodian may petition the court for an accounting by the predecessor custodian.

Section 3920 requires the custodian to transfer in an appropriate manner the custodial property to the minor or to the minor’s estate upon the earlier of three specified conditions.

Section 3920.5 specifies that, subject to the requirements and limitations of this section, the time for transfer to the minor of custodial property transferred may be delayed until a specified time after the time the minor attains the age of 18 years, which time is to be specified in the transfer.

Section 3921 provides that, subject to the power of the court to transfer actions and proceedings as provided in the Code of Civil Procedure, a petition filed under this part is required to be heard and proceedings held in the superior court in the proper county, which is determined as set forth in this section.

Section 3925 explains that this part is not to be construed as providing an exclusive method for making gifts or other transfers to minors.