Uniform Gifts to Minors Act (UGMA) business definition

Uniform state laws that facilitate irrevocable gifts to a minor by eliminating the requirement of a guardian or trust. A custodian, who may be the donor, is appointed to manage the gift, but full rights to the principal and income reside with the minor, who gains control upon reaching the applicable age (usually 18 or 21). Earnings are reported to the IRS using the minor's Social Security number.