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Here’s how custodial accounts work.
Under the UGMA or UTMA, the ownership of the funds works like it does with any other trust and the donor must appoint a custodian (the trustee) to look after the account for the benefit of the beneficiary. [citation needed] Until 1986, a UGMA or UTMA account allowed the assets to be taxed at the minor's income tax bracket. Tax law changes in ...
Custodial accounts can hold more than just cash and may affect future financial aid eligibility. ... designed for children under age 18, and there is joint ownership between the parent and child ...
Account Status. Once the child reaches the age of majority–18 or 21–the custodial Roth IRA becomes a Roth IRA. At this point, the custodian no longer has decision making authority over the ...
Custodial accounts come in a number of forms, one being an account set up for a minor, since the minor is under the legal age of majority. The custodian is often the minor's parent. In the U.S., this type of account is often structured as a Coverdell ESA, allowing for tax-advantaged
The Uniform Transfers To Minors Act (UTMA) is a uniform act drafted and recommended by the National Conference of Commissioners on Uniform State Laws in 1986, and subsequently enacted by all U.S. States, which provides a mechanism under which gifts can be made to a minor without requiring the presence of an appointed guardian for the minor, and which satisfies the Internal Revenue Service ...
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After the voting age was lowered from 21 to 18, the age of majority was lowered to 18 in most states. In most US states, one may obtain a driver's license, consent to sexual activity, and gain full-time employment at age 16 even though the age of majority is 18 in most states. [ 3 ]