What is a Custodial account?
A Custodial account allows a parent, guardian, or other family members/friends to open an investing account for a minor. The adult (or custodian) who opens the account manages the investments until the minor reaches the age of majority. That age is usually 18 or 21, depending on the Custodian’s state.
Click here to open a Custodial account
Stash offers two types of Custodial accounts, as allowed by state law:
- Uniform Transfer to Minors Act (UTMA): Allows virtually any kind of asset, including real estate, to be transferred to the minor.
- Uniform Gift to Minors Act (UGMA): Limits gifts and transfers to securities and bank deposits.
The account type (UTMA or UGMA) is decided by which state the person opening the account (the Custodian) resides in.
What happens when the child reaches the age of majority?
When the minor reaches the age of majority, all of the money in the Custodial account becomes their property.
The assets deposited into a Custodial account cannot be taken back or given to someone else.
Can the money be used to help the child before they are the age of majority?
Money in a custodial account can be used by the parent or legal guardian before the child reaches the age of majority, but only to do things that benefit the child.
Some examples of uses that benefit a child include:
- Educational expenses (including school uniforms)
- Daycare
- Activities or lessons (music classes, swimming lessons etc.)
If you’re not sure whether something you would like to use the money for qualifies as benefitting the minor, a financial advisor can help you answer the question.
Need to withdraw funds from a custodial account, or transfer the account to a minor who has reached the age of majority? Please give us a call at 800-205-5164 from 8:00 a.m.-8:00 p.m. ET Monday-Friday, or email us at support@stash.com.
DISCLOSURES
“Kids Portfolio” is a custodial UGMA / UTMA account. Money in a custodial account is the property of the minor. This type of account is a Non-Discretionary Managed account.
Related questions View all Custodial
-
Q. IRA Close or Withdrawal State IRA Withholding Requirements
Traditional IRA required state withholdings. If you’re requesting to make a partial withdrawal from your Traditional Individual Retirement Account (IRA), or to close it completely, you’ll need to fill out a withdrawal form before the account can be closed. On this form,…
-
Q. Quick Start Your Stash – 2024 New Depositor Promotion
Looking to take control of your finances in 2024? If you’re a new customer or have not yet made a deposit into your Stash account prior to 01/01/24, you can earn up to $10. To earn the first $5 promo, deposit at least $5 into your Personal or Smart Portfolio by 4/30/24.…
-
Q. Everything you Need to Know about Dividends
A dividend is a payment to a shareholder when a company shares its profits. The amount of dividends you receive will be proportional to the amount of stock you own in that company. Dividends are usually paid in cash (not additional stock),…
Didn’t find your question?
Tell us what you’re looking for, and we’ll search for resources that could help.
Ask your question