My Father gifted $50,000 to my daughter over a 5 year period. This money is in a UGMA account on my daughter's behalf. I now have three children. My father's intent was to provide for all of my children. However, he does not have money to gift to my other children. Is it possible to gift $10,000 out of my daughter's account to each of her siblings?
UGMA and UTMA accounts are in the name of a single child(Your daughter), the funds are not transferrable to another beneficiary. There are strict rules governing UTMA/UGMA accounts. As a custodian, you do not own the assets in the accounts; the minor ultimately owns the asset, however, you can make certain withdrawals from the account to cover expenses for the benefit of the child, such as school fees, tutoring, computer equipment, etc. I'm not sure gifting some of the money to her other siblings will actually benefit your daughter who happens to be the real beneficiary.
The UTMA is actually very liberal in how custodians can spend the money: "A custodian may deliver or pay to the minor or expend for the minor's benefit so much of the custodial property as the custodian considers advisable for the use and benefit of the minor . . . ." A custodian might reasonably consider expending the UTMA money on groceries the benefit the child, for instance.
The text of the Uniform Transfers to Minors Act states (Section 14, paragraph a):
A custodian may deliver or pay to the minor or expend for the minor's benefit so much of the custodial property as the custodian considers advisable for the use and benefit of the minor, without court order and without regard to (i) the duty or ability of the custodian personally or of any other person to support the minor, or (ii) any other income or property of the minor which may be applicable or available for that purpose.
Unfortunately, it is pretty hard to make the case that giving the money to her siblings is for the "use and benefit" of your daughter.
However, when your daughter reaches the age of maturity, any money left in the UTMA account becomes hers. She, at that time, could give money to her siblings, if she chooses. Perhaps you and your father could talk to her about your father's wishes for this money, and that would show her that she should do so at that time.
If you don't follow these rules, then your daughter or your father could sue you at any point in the future.