UTMA Custodial Accounts
GoalMine Custodial Accounts
GoalMine offers UTMA (Uniform Transfer to Minors Act) custodial accounts in addition to individual accounts.
A UTMA account is a type of custodial account which is used to hold and protect assets for a minor. When you put cash or other assets in an UTMA account, the child becomes the owner immediately, but does not gain control of the assets until he or she reaches the age of majority for that state (18 or 21 depending on the state). Once the minor reaches the age of majority, he or she is free to use the funds for any purpose.
Any adult with a valid tax identification can establish a UTMA on behalf of a minor. The custodian does not need to be a family member; he or she is simply the individual designated to make decisions about how funds are invested and spent until the child is old enough to do.
As the custodian of a UTMA account, you have authority to make decisions about how the funds are invested until the minor reaches the age of majority. You may withdraw the funds at any time, but you are obligated to use them for the benefit of the minor for whom the account was established.
The minor will have to file taxes reporting the income generated from the account, with the first $950 being tax-free and any additional income generally being taxed at the tax bracket of the parent. Capital gains and other normal taxes would also apply to the minor.
Please note that this information is intended to provide a general guideline only, and may not be up to date. GoalMine is not a tax advisor. For a definitive understanding of tax consequences for UTMAs, please contact a tax adviser or the IRS.