Custodial account.Here, the child is the account owner but the parent/guardian maintains control and oversight. You may see these accounts referred to as UTMA or UGMA, which stand for Uniform Transfer to Minors Act and Uniform Gifts to Minors Act, respectively. The child does not have access...
Depending on the state, a UTMA account is handed over to a child when they reach either age 18 or age 21. In some jurisdictions, at age 18 a UTMA account can only be handed over with the custodian’s permission, and at 21 is transferred automatically. Inquire with the bank or brokerage...
Even though you, the parent, choose investments, custodial account assets belong to your child. Unlike savings accounts or CDs, you can't withdraw the money for yourself or transfer it to another person—assets may only be withdrawn if they are to be used to benefit the child. When your ...
All UGMA accounts are irrevocable. As such, once you transfer assets to the account, they become the property of the minor and are no longer yours.3This means that you can't change your mind, so once the transfer is complete, it's there for good. UGMAs can be used against the benefi...
UGMA vs. UTMA accounts: What’s the difference? The Uniform Transfer to Minors Act (UTMA) is an expansion of the UGMA and allows the custodian to transfer any kind of property to the minor. In addition to the cash and securities permitted under UGMA, UTMAs can include risky assets and ...
Good to know: Unlike money in an education account, money put into a UGMA or UTMA can be used for any purpose, not just college tuition. And be aware that if the child applies for financial aid, the assets in a custodial account are considered the student’s and can affect their eligib...
A Uniform Transfers to Minors Act (UTMA) account allows an adult to transfer assets to a minor through a custodial account. Here’s how it works: An adult sets up a UTMA account and makes contributions. The adult serves as the custodian of the account and has full control until the minor...
There are two types of custodian accounts: Uniform Transfer to Minors Act accounts (UTMA) and Uniform Gift to Minors Act accounts (UGMA). Only financial assets like cash, stocks, and bonds can be invested into a UGMA account. UTMA accounts allow for other types of valuable assets like real...
much money you can put into a ugma or utma, though there may be gift tax consequences for contributions above the $18,000 annual gift tax exclusion for 2024. these accounts are best for a child whom you believe is responsible. they will legally be able to use the money in the ac...
Colleges use the asset information from your FAFSA to calculate your financial aid eligibility. However, not all funds are treated equally.