CHAPTER 557

AN ACT to repeal §§ 31-19 through 31-25 of the Code of Virginia, and to
amend the Code of Virginia by adding in Chapter 4 of Title 31, new
sections numbered $1-19.1 through 81-19.12, the repealed and new
sections all relating to gifts to minors.

[S 113]

Approved March 29, 1958

Be it enacted by the General Assembly of Virginia:
1. That §§ 31-19 through 31-25 of the Code of Virginia are repealed.
2. That the Code of Virginia be amended by adding in Chapter 4 of Title
31, new sections numbered 31-19.1 through 31-19.12 as follows:

§ 31-19.1. In this chapter, unless the context otherwise requires:

(a) An “adult’’ is a person who has attained the age of twenty-one

years.

(b) A “bank” is any bank, trust company or bank and trust company,
whether State or national, authorized by law to exercise trust powers and
to take, accept and execute trusts of a fiduciary character.

(c) A “broker” is a person lawfully engaged in the business of effect-
ing transactions in securities for the account of others. The term includes
a bank which effects such transactions. The term also includes a person
lawfully engaged in buying and selling securities for his own account,
through a broker or otherwise, as a part of a regular business.
ee a a a ? See ae: See Se eee, ee ee ee eee eee

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conversion, investment, reinvestment or other disposition of such securi-
ties, money and income.

(f) A “custodian” is a person so designated in a manner prescribed
in this chapter.

(g) A “guardian” of a minor includes the natural guardian, guardian,
committee or curator of his property, estate or person.

(h) An “issuer” is a person who places or authorizes the placing of
his name on a security (other than as a transfer agent) to evidence that
it represents a share, participation or other interest in his property or
in an enterprise or to evidence his duty or undertaking to perform an
obligation evidenced by the security, or who becomes responsible for or in
place of any such person.

(i) A “legal representative” of a person is his executor or the adminis-
regte, guardian, committee, conservator, or curator of his property or
estate.

(j) A “member” of a “minor’s family” means any of the minor’s
parents, grandparents, brothers, sisters, uncles and aunts, whether of the
whole blood or the half blood, or by or through legal adoption.

(k) A “minor” is a person who has not attained the age of twenty-one
years.

(1) A “security” includes any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation
in an oil, gas or mining title or lease or in payments out of production under
such a title or lease, collateral trust certificate, transferable share, voting
trust certificate or, in general, any interest or instrument commonly known
as a security, or any certificate of interest or participation in, any tempo-
rary or interim certificate, receipt or certificate of deposit for, or any
warrant or right to subscribe to or purchase, any of the foregoing. The
term does not include a security of which the donor is the issuer. A security
is in “registered form” when it specifies a person entitled to it or to the
rights it evidences and its transfer may be registered upon books main-
tained for that purpose by or on behalf of the issuer.

(m) A “transfer agent” is a person who acts as authenticating
trustee, transfer agent, registrar or other agent for an issuer in the
registration of transfers of its securities or in the issue of new securities
or in the cancellation of surrendered securities.

(n) A “trust company” is a bank authorized to exercise trust power
in this State.

_.. § 31-19.2. (a) An adult person may, during his lifetime, make a

gift ote security or money to a person who is a minor on the date of
e gift:

_ (1). if the subject of the gift is a security in registered form, by

registering it in the name of the donor, another adult person or a trust

company, followed, in substance, by the words: “as custodian for

eececcccccseccoe

oo. ; (name
GBwNaTUTIssacevnccnsasentccnonegnseoooes under the Virginia Uniform Gifts to Minors Act”;
of minor)
_ (2) if the subject of the gift is a security not in registered form, by
delivering it to an adult person other than the donor or a trust company,
accompanied by a statement of gift in the following form, in substance,
signed by the donor and the person designated as custodian:

“GIFT UNDER THE VIRGINIA UNIFORM GIFTS TO MINORS ACT

Ty cansacnenneapsutenanunenneaadasinienebenmranene hereby deliver tO .........cscssccssesseeees sessesnsenensee
(name of donor) (name of custodian)

AS custodian fOr ...........ccceesscssceseseees under the Virginia Uniform Gifts to

(name of minor) oo.
Minors Act, the following security (ies) : (insert an appropriate description
of the security or securities delivered sufficient to identify it or them)
(signature of donor)

sdssseenseeessessceuseesscestaeeseseseesseeesseeessens hereby acknowledges receipt of the above
(name of custodian)

described security(ies) as custodian for the above minor under the Vir-

ginia Uniform Gifts to Minors Act.

Dated swiss —«-_- trata aTE CaN SMNeRITNOpRERORTOREERRRN

(signature of custodian)

(3) If the subject of the gift is money, by paying or delivering it to a
broker or a bank for credit to an account in the name of the donor, an-
other adult person or a bank with trust powers, followed, in substance, by
the words: “as custodian fO9r ..........cccccscssscssssesssceseceseeesssesseesceeesenenes under the

(name of minor)
Virginia Uniform Gifts to Minors Act”’.
Any gift made in a manner prescribed in Subsection (a) may be
made to only one minor and only one person may be the custodian.

(c) A donor who makes a gift to a minor in a manner prescribed
in Subsection (a) shall promptly do all things within his power to put
the subject of the gift in the possession and control of the custodian,
but neither the donor’s failure to comply with this subsection, nor his
designation of an ineligible person as custodian, nor renunciation by the
person designated as custodian affects the consummation of the gift.

§ 31-19.3. (a) A gift made in a manner prescribed in this chapter is
irrevocable, but no guardian of the minor has any right, power, duty or
authority with respect to the custodial property except as provided in this
chapter.

(b) By making a gift in a manner prescribed in this chapter, the
donor incorporates in his gift all the provisions of this chapter and grants
to the custodian, and to any issuer, transfer agent, bank, broker or third
person dealing with a person designated as custodian, the respective
powers, rights and immunities provided in this chapter.

§ 31-19.4. (a) The custodian shall collect, hold, manage, invest and
reinvest the custodial property.

(b) The custodian shall pay over to the minor for expenditure by
him, or expend for the minor’s benefit, so much of or all the custodial
property as the custodian deems advisable for the support, maintenance,
education and benefit of the minor in the manner, at the time or times,
and to the extent that the custodian in his discretion deems suitable and
proper, with or without court order, with or without regard to the duty
of himself or of any other person to support the minor or his ability to
do so, and with or without regard to any other income or property of the
minor which may be applicable or available for any such purpose.

(c) The court, on the petition of a parent or guardian of the minor
or of the minor, if he has attained the age of fourteen years, may order
the custodian to pay over to the minor for expenditure by him or to expend
so much of or all the custodial property as is necessary for the minor’s
support, maintenance or education.
(d) To the extent that the custodial property is not so expended,
the custodian shall deliver or pay it over to the minor on his attaining
the age of twenty-one years or, if the minor dies before attaining the age
of twenty-one years, he shall thereupon deliver or pay it over to the estate
of the minor.

(e) The custodian, notwithstanding statutes restricting investments
by fiduciaries, shall invest and reinvest the custodial property as would a
prudent man of discretion and intelligence who is seeking a reasonable
income and the preservation of his capital, except that he may, in his dis-
cretion and without liability to the minor or his estate, retain a security
given to the minor in a manner prescribed in this chapter.

(f) The custodian may sell, exchange, convert or otherwise dispose of
custodial property in the manner, at the time or times, for the price or
prices and upon the terms he deems advisable. He may vote in person or
by general or limited proxy a security which is custodial property. He
may consent, directly or through a committee or other agent, to the reor-
ganization, consolidation, merger, dissolution or liquidation of an issuer,
a security of which is custodial property, and to the sale, lease, pledge or
mortgage of any property by or to such an issuer, and to any other action
by such an issuer. He may execute and deliver any and all instruments
in writing which he deems advisable to carry out any of his powers as
custodian.

(g) The custodian shall register each security which is custodial
property and in registered form in the name of the custodian, followed, in
substance, by the words: “as custodian fOr ...........s:sscsssssessssreeseeeees under

(name of minor)
the Virginia Uniform Gifts to Minors Act.” The custodian shall hold all
money which is custodial property in an account with a broker or in a
bank in the name of the custodian, followed, in substance, by the words:
“as, CUStOdIAaN: £OF sisiccisecvessissscsesvasesscsevecsesveeves under the Virginia Uniform
(name of minor)

Gifts to Minors Act”. The custodian shall keep all other custodial property
separate and distinct from his own property in a manner to identify it
clearly as custodial property.

(h) The custodian shall keep records of all transactions with respect
to the custodial property and make them available for inspection at reason-
able intervals by a parent or legal representative of the minor or by the
minor, if he has attained the age of fourteen years.

(i) A custodian has and holds as powers in trust, with respect to
the custodial property, in addition to the rights and powers provided in
this chapter, all the rights and powers which a guardian has with respect
to property not held as custodial property.

§ 31-19.5. (a) A custodian is entitled to reimbursement from the
custodial property for his reasonable expenses incurred in the performance
of his duties.

(b) A custodian may act without compensation for his services.

(c) Unless he is a donor, a custodian may receive from the custodial
property reasonable compensation for his services determined by one
of the following standards in the order stated:

(1) A direction by the donor when the gift is made;
(2) A statute of this State applicable to custodians;
(3) The statute of this State applicable to guardians;
(4) An order of the court.

(d) Except as otherwise provided in this chapter, a custodian shall
not be required to give a bond for the performance of his duties.

(e) A custodian not compensated for his services is not liable for
losses to the custodial property unles they result from his bad faith, inten-
tional wrongdoing or gross negligence or from his failure to maintain
the standard of prudence in investing the custodial property provided in
this chapter.

§ 31-19.6. No issuer, transfer agent, bank, broker or other person
acting on the instructions of or otherwise dealing with any person purport-
ing to act as a donor or in the capacity of a custodian is responsible for
determining whether the person designated by the purported donor or
purporting to act as a custodian has been duly designated or whether any
purchase, sale or transfer to or by or any other act of any person purport-
ing to act in the capacity of custodian is in accordance with or authorized
by this chapter, or is obliged to inquire into the validity or propriety under
this chapter of any instrument or instructions executed or given by a
person purporting to act as a donor or in the capacity of a custodian, or
is bound to see to the application by any person purporting to act in the
gapenity of a custodian of any money or other property paid or delivered
to him.

§ 31-19.7. (a) Only an adult member of the minor’s family, a
guardian of the minor or a trust company is eligible to become successor
custodian. A successor custodian has all the rights, powers, duties and im-
munities of a custodian designated in a manner prescribed by this chapter.

(b) A custodian, other than the donor, may resign and designate his
successor by:

(1) executing an instrument of resignation designating the
successor custodian; and

(2) causing each security which is custodial property and in
registered form to be registered in the name of the successor
custodian followed, in substance, by the words: “as custodian for

TESTES under the Virginia Uniform Gifts to

(name of minor)
Minors Act’’; and
(8) delivering to the successor custodian the instrument of
resignation, each security registered in the name of the successor
custodian and all other custodial property, together with any
additional instruments required for the transfer thereof.

(c) A custodian, whether or not a donor, may petition the court for
permission to resign and for the designation of a successor custodian.

(d) If the person designated as custodian is not eligible, renounces
or dies before the minor attains the age of twenty-one years, the guardian
of the minor shall be successor custodian. If the minor has no guardian, a
donor, his legal representative, the legal representative of the custodian,
an adult member of the minor’s family, or the minor, if he has attained
the age of fourteen years, may petition the court for the designation of a
successor custodian.

(e) A donor, the legal representative of a donor, an adult member
of the minor’s family, a guardian of the minor or the minor, if he has
attained the age of fourteen years, may petition the court that, for cause
shown in the petition, the custodian be removed and a successor custodian
be designated or, in the alternative, that the custodian be required to give
bond for the performance of his duties.

(f) Where a guardian of the property of a minor has been duly
appointed in this State, a custodian under this act, holding property of
the minor of which he was the donor, may petition the court in which the
said guardian was appointed for permission to resign with respect to such
property and to deliver the same to the said guardian to be held and
administered by him in his capacity as guardian of the property of the
minor and not as successor custodian.

(g) Upon the filing of a petition as provided in this section, the court
shall grant an order, directed to the persons and returnable on such notice
as the court may require, to show cause why the relief prayed for in the
petition should not be granted and, in due course, grant such relief as the
court finds to be in the best interests of the minor.

§ 31-19.8. (a) The minor, if he has attained the age of fourteen
years, or the legal representative of the minor, an adult member of the
minor’s family, or a donor or his legal representative may petition the
court for an accounting by the custodian or his legal representative.

(b) The court, in a proceeding under this chapter or otherwise, may
require or permit the custodian or his legal representative to account and,
if the custodian is removed, shall so require and order delivery of all
custodial property to the successor custodian and the execution of all instru-
ments required for the transfer thereof.

§ 31-19.9. (a) This chapter shall be so construed as to effectuate its
general purpose to make uniform the law of those states which enact it.

(b) This chapter shall not be construed as providing an exclusive
method for making gifts to minors.

§ 31-19.10. This chapter may be cited as the “Virginia Uniform Gifts
to Minors Act”.

§ 31-19.11. If any provision of this chapter or the application thereof
to any person or circumstances is held invalid, the invalidity shall not
affect other provisions or applications of the chapter which can be given
effect without the invalid provision or application, and to this end the
provisions of this chapter are severable.

§ 31-19.12. The repeal of §§ 31-19 through 31-25 shall not affect gifts
made in a manner prescribed therein nor the powers, duties and immuni-
ties conferred by gifts in such manner upon custodians and persons dealing
with custodians. The provisions of this chapter henceforth apply, however,
to all gifts made in a manner and form prescribed in §§ 31-19 through
31-25 hereby repealed except insofar as such application impairs constitu-
tionally vested rights.

3. This act shall take effect July 1, 1958.