# Have You Established a UTMA Account for your Grand Or Great Grandchildren?



## Lon (Jun 25, 2017)

I established a UNIFORM TRANSFER to MINORS ACCOUNT (UTMA) for each of my five great grand children shortly after they were born. Instead of presents at Xmas & birthdays I make additional deposits. I did a similar thing for my three (now adult) grand children. My daughter is the Beneficiary Trustee when I croak.

[h=1]When Can You Withdraw From a UTMA Account?[/h]
May 13, 2011
By: John Csiszar



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A  Uniform Transfers to Minors Act, or UTMA, account is a way to transfer  money to an investment account for a child without having to set up a  legal trust. The accounts are established with an adult listed as the  custodian for the benefit of a minor child. The custodian manages the  investments in the account and takes appropriate withdrawals for the  child's expenses until the child reaches a majority age. Specific rules  dictate when and for what purpose withdrawals can be taken from these  custodial accounts.
[h=2]Ownership and Withdrawals[/h]Any *money placed into a UTMA account is the legal property of the beneficiary child*.  As a minor, a child cannot access the money in the account directly.  Rather, the custodian is charged with the responsibility of taking  appropriate distributions, which must be for the benefit of the child.  The law offers a lot of latitude regarding what is "for the benefit of  the child." As long as you can document that what you have spent the  money on benefits the child, you shouldn't run into any problems. Music  lessons, braces, a computer for school or even a car are allowable  withdrawals from a UTMA.
While the laws differ from state to state, *once a minor becomes an adult, he can legally withdraw from a UTMA account.* In most states, the age of majority  for UTMA accounts is either 18 or 21. When a child reaches adulthood,  most custodians will transfer the money from the UTMA to a standard  savings or investment account in the child's sole name, with no  custodian listed. This facilitates future withdrawals by the  beneficiary, as money in a noncustodial savings account can be withdrawn  by the legal owner with no restrictions.
[h=2]Consequences of Improper Withdrawals[/h]As a custodian, you can run into serious trouble  if you take an improper withdrawal from an UTMA account. For starters,  you'd be essentially stealing money from your child, as the money  doesn't belong to the custodian but to the child. If the child knows the  account exists, this could create an irreparable rift. Beyond that, *accessing the money for your own purposes is illegal*.  While prosecution may be unlikely, the fact remains that you would be  open to accusations of theft or embezzlement. Your child, or someone  acting on his behalf, could even sue you for the money.


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## OneEyedDiva (Jul 3, 2017)

I did mine though American Century and it's called Giftrust.  I did it for the first three grands. Didn't open one for a few reasons for the two youngest (now 12 &14) but opted a couple of years ago to open 529 plans for them.


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## terry123 (Jul 3, 2017)

Did 529 plans for mine.


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## tortiecat (Jun 4, 2019)

I intent to do something; but will ask her parents what they want
or what has already been established.


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## win231 (Jun 4, 2019)

I did a P.O.D. for my neice & nephew.  (Paid On Death).  All they have to do is present a death certificate & all funds in my CD & Checking go to them.


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