Most companies will oblige. If the transfer agent does not enroll the party directly into the plan, the individual will receive a stock certificate and, in most cases, a DRIP enrollment form. The individual who is receiving the transferred shares will need to fill out the enrollment form and return it to the company. A number of no-load stock plans offer this feature. Funds in the account are in the minor s name and social security number and are considered to be owned by the minor.
Dividends paid on the account are taxable, most likely at a preferred tax rate.
The adult custodian is responsible for the account until the minor reaches the age of majority. Any withdrawals from the account are payable to the custodian on the minor s behalf until that time. If you are interested in creating a UTMA, contact the company s shareholder services department for the proper forms. Ask Chuck your questions. Just log in and visit the message board section of our site.