Can Contributions Be Made From UGMA or UTMA Custodial Accounts?
A custodian for a minor under a state UGMA or UTMA statute may use the assets held in the UGMA or UTMA account to fund a Bright Directions® account, subject to the laws of the state under which the UGMA or UTMA account was established. If the custodian of the UGMA or UTMA account establishes an account, the minor for whose benefit the assets are held must be designated as the beneficiary, and the custodian will not be permitted to change the beneficiary. When the beneficiary reaches the age of majority under the applicable UGMA or UTMA statute and the custodianship terminates, the beneficiary will become the account owner with complete control over the account. The custodian is required to notify the program manager when the minor reaches the age of majority under the applicable UGMA or UTMA statute. The conversion of noncash UGMA or UTMA assets to cash for contribution to an account may be a taxable transaction. Before liquidating assets in a UGMA or UTMA account in order to contribut
