UTMA (Uniform Transfers to Minors Act) accounts are accounts that you set up for your child (otherwise called a “custodial” account). These accounts allow you to save money for your child, or give them valuable property, like real estate or stocks. Your child owns whatever you put into such an account but cannot do anything with it until they have reached age 18 or 21, depending on the state.

• There are no limits on how much you can put into such an account.
• You can contribute up to $10,000 per year without having to pay taxes on this amount.
• UTMA accounts are easier and cheaper to set up than trust funds

• Once your child gets access to their account, they can do whatever they want with the money.
• Once you put money or property into an UTMA account, you cannot take it out.
• The value of such an account may reduce your child’s eligibility for financial aid.