UTMA and UGMA Custodial Accounts for Minors

The Uniform Transfers to Minors Act (UTMA) provides a simple, inexpensive way to transfer ownership of cash and other financial assets to children.

Many people have questions about custodial accounts for minors. Our extensive guide deals with many of the most important issues.

Custodial Accounts 101
Read this page to get a general background on what custodial accounts under UTMA and UGMA are all about.

Advantages of Custodial Accounts
Why would you want to set up a custodial account? This page describes the main reasons.

Problems with Custodial Accounts
Custodial accounts aren’t always the best choice. They’re especially risky when dealing with very large amounts of money. Consider the points on this page before setting up an UGMA or UTMA account.

What Expenditures Are Proper?
Can I use the account to buy a car for my child? Or to send the child to private school?

Custodial Account Used for Support
Yes, you are allowed to  use UTMA accounts for items included in a support obligation, regardless of what you read elsewhere.

The Minor’s Right to the Money
Does the minor have an absolute right to the money? What happens if the custodian abuses that right?

UTMA Regret: When Custodial Accounts Turn Sour
What if you’ve already set up a custodial account and now realize it was a mistake? Here are some of the reasons for what we call UTMA regret, and strategies for dealing with it.

UTMA Regret: Strategies
Some strategies for dealing with an unwanted custodial account for a minor.

UTMA Regret: More Strategies
Additional ways of dealing with unwanted custodial accounts.

UTMA Regret: Still More Strategies
Concluding our discussion of dealing with unwanted custodial accounts.

UTMA Transfer to a 529 Account
Can you transfer a custodial account to a 529 savings account? Should you?

UTMA to 529: Making the Transfer
Learn what’s involved in transferring custodial UTMA assets to a 529 account.

UTMA to 529: Quest for Control
The rules for  529 accounts give strong control to the adult owner. But do they trump the UTMA rules?

UTMA to 529: Tax Consequences
The tax consequences of moving UTMA funds to a 529 account cut both ways.