UTMA regret?
The most common reason for regret over a custodial account is a realization that the child may not handle a large sum of money in a mature way at the age when control passes. When your child is 8, you imagine he or she will be a thoughtful young adult when the account passes to the child’s control. Ten years later you realize that your child still has a lot of growing up to do. The second most common reason for UTMA regret is learning how the account will affect eligibility for financial aid. Often the original motivation for the account was college savings. Ironically, using UTMA to put college savings in your child’s name can make it more difficult to finance higher education, because the financial aid formula in effect imposes a penalty for assets owned by the child. There’s a third reason for UTMA regret. Sometimes the parents put a good chunk of money into the account and then find that they need it. Maybe they’re trying to come up with a down payment for a new home. Possibly they
