Tax rules on custodial accounts like UTMAs are sometimes difficult to understand. However, it can hold all the same financial assets as UGMA, plus physical assets like precious metals and real estate. The UTMA was created 30 years after the UGMA and has not been adopted in every state. You can open a UGMA account in any state and use it to hold financial assets, like cash, stocks, bonds, mutual funds, and insurance policies for the children in your life. Both UTMAs and UGMAs serve the same purpose, but there are some rule differences. UTMAs have a counterpart called Uniform Gifts to Minors Act (UGMA) accounts. UTMAs may also help meet a child’s financial goals, like buying their first home, paying for college, or starting their own business. Build great financial habits, such as setting aside a chunk of each paycheck to invest or save.They can learn some basic tax matters and have a solid understanding of money, investing, and wealth-building as they begin adulthood. Introduce kids to selecting and managing investments. The child might have significant assets to pass down by the time they grow old. Thanks to compounding, this can put them ahead of the game when they become adults. Help children build their assets early.UTMAs, like other custodial accounts, have several key benefits:
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