Custodial Accounts (UTMA)

A Uniform Transfers to Minors Act (UTMA) custodial account allows you to gift or transfer assets to a minor without giving them direct access, making it ideal for funding future education expenses, with the custodian managing the investments until the minor reaches the legal age.

  • These can be opened as a Savings Account or a Certificate of Deposit (CD).
  • Custodial accounts allow you to transfer a wide range of assets, including cash, stocks, bonds, and real estate, to a minor for their future needs.
  • There are no income restrictions to be met.
  • UTMAs allow for an unlimited number of contributions, as well as unlimited contribution amounts.
  • The custodian is required to transfer any remaining funds to the minor when he/she reaches age of majority (Louisiana 22, Mississippi 21, Texas 21). There is no deadline to use the funds in an UTMA, but by age of majority, the money becomes the sole property of the minor.
  • The earnings are taxed under the minor’s social security number, which is often at a lower rate than the custodian’s tax bracket.