These are both good options for providing management of your child’s property, but you may prefer one over the other based on your particular situation.
Some things to consider when choosing between the two options:
Age: UTMA Custodianships end no later than when the child turns 18, 21, or 25 (depending on the age set by your state); by contrast, a Child’s Trust can extend much longer and generally lasts until any age between 18 and 35.
Some people choose a Child's Trust when leaving highly valuable property to their children, as they consider 18 or 21 too young to be receiving so much property. A Child’s Trust can be more appropriate for parents who believe their child will need someone to manage the property farther into adulthood.
Administration: For situations in which the child’s age is less important, some people choose a UTMA Custodianship because it is simpler to administer than a Child's Trust. For example, while a separate income tax return must be filed for a Child's Trust, income from a UTMA Custodianship is included in the child-beneficiary’s tax return.
Choice: Some prefer a UTMA Custodianship because it gives them the option of appointing someone other than the successor trustee to manage their child’s property. With a Child’s Trust, the successor trustee is automatically the person who will manage the child’s property, but with a UTMA Custodianship, any person can serve as the custodian of the child’s property.
These are just a few of things to think about when choosing which type of property management you want to use.