To transfer a UTMA account to a child who has reached adulthood, confirm the termination age set by the state law governing the account, then file a change-of-registration form with the brokerage or bank so the custodial designation is removed and the assets are re-titled in the beneficiary’s name as an individual account. Once that paperwork clears, the young adult has full control and the custodian’s authority ends.
Confirm the Termination Age First
Every state sets its own rule for when a UTMA custodianship ends. Eighteen is common for other legal purposes, but UTMA accounts often keep the custodian in control until 21. A handful of states allow extensions to 25 for certain transfers, such as irrevocable gifts or transfers authorized by a will or trust.1Social Security Administration. POMS SI SF01120.205 – Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA) – Age of Majority
Two things determine the age: which state’s law governs the account, and how the original transfer was written. In some states, the donor could pick a delayed termination age at the time the account was opened, and that choice is locked in by the language of the original transfer document. Pull the original account agreement, or call the financial institution, and confirm the exact age before starting anything else. When the beneficiary reaches that age, the custodian’s authority ends and the transfer has to happen.
Gather the Paperwork and Identification
Before opening the form, collect the following for both the custodian and the beneficiary:
- The beneficiary’s Social Security number, so the institution can open the new individual account and set up tax reporting.
- The existing custodial account number.
- A government-issued photo ID for each of you, such as a driver’s license or passport. Federal regulations require financial institutions to verify the identity of every new account holder.2eCFR. 31 CFR 1020.220 – Customer Identification Program Requirements for Banks
- The beneficiary’s contact and employment information, used for identity verification and the new account’s risk profile.
The institution will provide a form, often titled Change of Registration or UTMA Termination, that instructs the brokerage to strip the custodial designation and re-register the assets in the beneficiary’s name. Some firms handle this through a secure online portal; others still use paper.
Some brokerages require a Medallion Signature Guarantee on the paperwork. This is a specialized fraud-prevention stamp issued by participating banks and brokerages, and it is not the same as a notary seal. Many institutions provide it at no cost to existing clients, but policies vary. Ask your bank or brokerage in advance whether one is required and where you can get it.
Submit the Change of Registration
Send the completed form through the institution’s approved channel. Many brokerages accept a digital upload through the secure portal; you can also hand the forms in at a branch or send them by certified mail to the processing center.
How long it takes depends on the institution and what’s in the account. A simple re-registration at the same brokerage, which is the usual situation, generally runs about one to two weeks. If assets have to move to a different firm through the Automated Customer Account Transfer Service (ACATS), the receiving firm typically completes the transfer within six business days after the instruction is entered, though the full process can take two to three weeks from start to finish.3U.S. Securities and Exchange Commission. Transferring Your Brokerage Account – Tips on Avoiding Delays
Once the change is approved, the beneficiary receives their own login credentials and full authority to trade, withdraw, or hold the assets without any custodial oversight. Both the former custodian and the new account holder usually get written confirmation that the transition is complete.
Hand Over Records and Close Out Your Role
When the registration change goes through, the custodian’s fiduciary duty is permanently over. The former custodian can no longer access the account, make investment decisions, or authorize withdrawals. The legal relationship is severed.
As a final step, give the beneficiary complete account records along with any tax documents covering the current year, including forms such as 1099-DIV for dividends or 1099-B for capital gains from sales that report income generated before the transfer. The beneficiary needs those documents to file an accurate return and to establish cost basis for anything they still hold. From the transfer date forward, the beneficiary alone is responsible for tax reporting and investment decisions.
Taxes at the Transfer and After
Re-registering the account is not a taxable event. The minor has legally owned the assets since the original gift was made, so updating the account title only reflects existing ownership. No capital gains tax, no gift tax.
Cost Basis Carries Over
When assets move in kind, without being sold, the original cost basis carries over. If the custodian bought a stock at $20 a share, the beneficiary’s basis stays $20 a share, and any gain or loss is measured from there when the beneficiary eventually sells. If the custodian instead liquidates investments and transfers cash, that sale generates capital gains or losses for the beneficiary in the year of sale, because the beneficiary is the legal owner.
The Kiddie Tax Can Still Apply
The kiddie tax can still reach the beneficiary’s unearned income, meaning dividends, interest, and capital gains, even after the account has been handed over. For 2026, the thresholds are:
- The first $1,350 of unearned income is tax-free, covered by the standard deduction for dependents.
- The next $1,350 is taxed at the child’s own rate.
- Anything above $2,700 is taxed at the parent’s marginal rate, which is often significantly higher.4IRS. Revenue Procedure 2025-32 – 2026 Adjusted Items
The kiddie tax applies to children under 18. It also reaches 18-year-olds whose earned income does not cover more than half their own support, and full-time students under 24 who meet the same support test.5Office of the Law Revision Counsel. 26 USC 1 – Tax Imposed A college student who takes possession of a UTMA account at 21 could still owe tax at a parent’s rate on investment income above $2,700 if they’re under 24, enrolled full-time, and not earning half their own support. The beneficiary reports this on IRS Form 8615.
FAFSA Impact You Should Know About
UTMA assets count as the student’s assets on the Free Application for Federal Student Aid, regardless of whether the student is a dependent.6Federal Student Aid. Current Net Worth of Investments, Including Real Estate (2025-26) Student-owned assets are assessed at 20% in the Student Aid Index calculation, so every $10,000 in a UTMA account can reduce financial aid eligibility by up to $2,000.7U.S. Department of Education’s Federal Student Aid. 2026-27 Student Aid Index (SAI) and Pell Grant Eligibility Guide Parent-owned assets, by comparison, are assessed at a maximum of roughly 5.6%. Transferring the account to the beneficiary does not change this treatment; the assets were already the student’s on the FAFSA before the paperwork was filed.
If the Custodian Refuses or Delays
Once the beneficiary reaches the statutory termination age, the custodian is legally required to hand the assets over. A custodian who refuses or simply drags their feet exposes themselves to legal action. The beneficiary can file a court proceeding to compel delivery of the property and demand a full accounting of every transaction. If funds were misused or depleted, there may also be a claim for breach of fiduciary duty. Courts can remove the custodian, appoint a successor, and order restitution.
The custodian has no authority to keep managing or spending the funds after the termination age. Any transactions made after that date without the beneficiary’s consent can create personal liability for the former custodian.