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Unlike 529 accounts, custodial brokerage accounts come with no contribution limits, meaning you can invest as much money as you’d like for your child’s future. That said, those who make large gifts may face gift taxes each time their contributions to any one recipient exceed $15,000 in a year.
Money put into a custodial account is an irrevocable gift to the child the account was established for—the custodian must ensure that it is invested and used for the child's benefit. Between the age of 18 and 25 (it varies by state) legal control of the account must be turned over to the child, who can then use the money for any purpose they ...
The age at which the minor takes control of the custodial account depends on the minor’s state of residence and whether the custodial is a Uniform Transfers to Minors Act (UTMA) or a Uniform Gifts to Minors Act (UGMA) account.
The type of account (UGMA versus UTMA) and the age of majority are determined by the state of residence of the custodian. UGMA/UTMA beneficiaries must reach a specific “age of majority” under UGMA/UTMA statutes before the account can be transferred into their name.
The age of majority in most states is 18 years old. In most states, the age of adulthood is defined separately for custodial accounts. With some exceptions, a minor can't receive the funds in an UTMA account unless they're at least 21 years old.
The UTMA is allowed in all states except Vermont and South Carolina. The UGMA is allowed in all 50 states. A UTMA account can hold virtually any kind of asset, including real estate,...
Each state sets its own law regarding the age of majority, but it's typically 18 or 21 years of age. Some states allow the custodian to specify an older age when account ownership will...
Custodial accounts allow you to open and manage an investment or savings account on behalf of a minor. You are the account custodian until the minor reaches the age of majority in their state.
What is a custodial account? An account where an adult serves as custodian and holds supervisory powers over the investments. The account will conform to Uniform Gift to Minors Act (UTMA) or the Uniform Transfer to Minors Act (UTMA) rules depending on the state statutes.
A custodial account can be opened for and to benefit a minor, typically a person under the age of 18 or 21 depending upon the applicable state law. This account is controlled by an adult who serves as the custodian until the minor reaches the age of termination (typically 18 or 21, but some state laws allow an older age). With each custodial ...