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Enjoy potential tax benefits when you invest for your child’s future. A custodial account is an easy way for parents, family members, and guardians to transfer their wealth to a minor, often without requiring the services of an attorney. Assets are managed by the custodian and then transferred to the minor when he or she becomes a legal adult.
Two main types of custodial accounts are UTMA (Uniform Transfers to Minors Act) and UGMA (Uniform Gifts to Minors Act) accounts. Please note that while UTMA accounts allow the gift to transfer to a minor at 21 years of age, UGMA accounts allow a minor to receive the gifts at 18 years of age.
A custodial account is easier and less expensive to set up than a trust account.
Up to $14,000* per beneficiary, per donor, per year will not be subject to a gift tax.
All assets are considered a gift with no limitations on how much you can entrust to the minor —including money, mutual funds, life insurance, annuities, real estate, and more.
Assets can be used to help fund an education or for other approved expenses.
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