what are the pros and cons of using a utma account 
the main advantage of using a utma account is that the money contributed to the account is exempted from paying a gift tax of up to a maximum of 18 000 per year for 2024 2 any income earned on the contributed funds is taxed at the tax rate of the minor who is being gifted the funds since the minor s income is presumably significantly lower than that of the adult donor this can lead to significant tax savings 6one of the drawbacks of using a utma account however is that it can make the recipient less eligible for need based college scholarship programs and other such initiatives 4