Parents set up custodial accounts for children for various reasons, some legitimate and some not. ... 5 things to know about custodial accounts for kids ... the Kiddie Tax rules make it difficult ...
Custodial Account Rules While there are multiple reasons that a parent or legal guardian may have to open a custodial account, the process to begin is the same. The account can be opened at a brokerage firm, a mutual fund company, bank or any other type of financial institution.
A custodial account is a savings account set up and administered by an adult for a minor. In a broad sense, a custodial account can mean any account maintained by a fiduciarily responsible party ...
Custodial Accounts. A custodial account is a bank or other financial account that a person opens for the benefit of another person, called the beneficiary. The person who opens the account is often the "custodian" -- the person who manages the account -- although it's also possible to name a third party as custodian.
The offering of Custodial Savings for Youth (UTMA/UGMA) Accounts should not be construed in any way as the providing of legal or tax advice by Bank of America. ← back to content For Rewards Savings accounts opened on or after August 13, 2018, we will waive the monthly maintenance fee for six months from account opening.
A custodian bank, or simply custodian, is a specialized financial institution responsible for safeguarding a firm's or individual's financial assets and is not engaged in "traditional" commercial or consumer/retail banking such as mortgage or personal lending, branch banking, personal accounts, Automated Teller Machines (ATMs) and so forth. The ...
Some states allow a minor to open a bank account jointly with a parent or legal guardian. These accounts differ from custodial accounts in that both owners have equal access to the account and everything in it. Moreover, both owners have the right to withdraw 100 percent of the money in the account without the co-owner’s knowledge or consent.
A custodian can initiate a withdrawal for the benefit of the child as long as the expenses are for legitimate needs. Any expense that is for the benefit of the child, such as precollege educational expenses, may be paid from the custodial account, at the custodian’s discretion.
If an account beneficiary is a minor, a custodian is often required due to the rules and regulations limiting the activities of minors, resulting in the creation of a custodial account. The ...
For children younger than age 19 (or 24 for a full-time student), the "kiddie tax" rules may be applicable. If applicable, the minor's unearned income from the custodial account may be taxed at the higher Trust and Estate tax rates. Discuss these rules with your tax advisor to determine if they are applicable to your specific tax situation.