Can a child have multiple UTMA accounts?

That said, you can get around this limit by setting up multiple ESAs for the same beneficiary if you wish. Another category of custodial accounts are the Uniform Transfer to Minors Act (UTMA) account and the Uniform Gift to Minors Act (UGMA) account.

Can UTMA accounts be used for anything?

Any expenditures from an UGMA / UTMA are legally required to be for the benefit of the child and – importantly – not be considered part of parental obligations. Parents are obligated to feed, house and clothe their children. Therefore you cannot use UGMA / UTMA money for food, housing and clothing.

Can you have multiple custodians on a UTMA account?

Can you have more than 1 custodian on a UTMA Account? A transfer may be made for only one (1) minor, and only one (1) person may be the custodian. All custodial property held under this act by the same custodian for the benefit of the same minor constitutes a single custodianship.

What should I invest my UTMA account in?

Once the account is funded, it is common to invest the funds in stocks, bonds, mutual funds etc. However, it is critical to identify the time horizon to appropriately invest the funds.

Can a minor gift money to a UTMA account?

UTMA accounts provide a way to gift money to minor children. Contributing funds to UTMA accounts constitutes an irrevocable gift. Once you gift the funds, they must be managed for the benefit of the minor and you cannot change the beneficiary. However, there is a lot of flexibility with this type of account.

What happens if you spend your child’s UTMA money?

In the United States, a child’s money does not belong to the child’s parents or guardians. If you’re thinking about spending your child’s UTMA money, think again. You could face a significant legal penalty that could wipe out years of your savings, if not throw you into bankruptcy.

Can a custodian take money out of an UGMA account?

Custodial account withdrawal rules dictate that custodians are forbidden from using the funds for anything other than to directly benefit the child. Since assets legally belong to the minor once they are deposited to the UGMA or UTMA account, or as income generated from investments, the custodian is not able to take funds back at any point.