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should i open an UTMA? something else?

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  • #16
    Originally posted by 8arclay View Post
    My kids are young, 4 and 2. Up until now, we've always just put any gifts towards their 529, all but one have been $100 or less. This thread has me thinking, those really aren't moving the needle and aren't going to impact them in any significant way (we are already contributing to their 529 $10k/yr). So, I think I'm going to just set up a basic custodial savings account for each of them. That way it's clearly theirs and they'll be able to save and contribute to it at a young age. Once they're old enough to work get an IRA going and teach investing
    Gifts, allowance, and job earnings are deposited into a local credit union account. We keep the balance around $100-$200 and the rest invested in a UTMA brokerage account invested in Vanguard Target Date 2060. Kids get the ‘local bank’ experience, but benefit from long term growth of their savings/earnings. The amount is relatively modest, so UTMA is not a concern here.

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    • #17
      We put birthday and Christmas money into a UTMA. I hope to use it as a teaching vehicle when they are old enough.

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      • #18
        Is there a better way to protect the kids money (utma, trust) from a future divorce without a prenup?

        my biggest concern is a 6 figure number where half goes to some dead beat ex son-in-law...

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        • #19
          Originally posted by Sundance View Post
          Is there a better way to protect the kids money (utma, trust) from a future divorce without a prenup?

          my biggest concern is a 6 figure number where half goes to some dead beat ex son-in-law...
          Better than what?
          Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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          • #20
            Originally posted by Bellescamp View Post
            ...

            vagabond - i am 90+% sure a UTMA would work out fine with my kids. But they are still young. Did you have no doubts?
            Not really, because I also had a UTMA growing up. My father used it to pay for college and med school, and when there was a little left over, he signed it over to me. I had no idea how to get to the money. It always came from him, even though I vaguely knew that it was my money and that I could probably get to it.

            Our estate attorney suggested that we could create a series of trusts and LLCs to control the trusts to retain control over the money, but it was very complicated (and costly to set up and maintain, too). In the end, we just decided against it.

            I helped my son (22) set up his own account. I am the beneficiary and have sign in rights to his account and his login credentials. I would guess that if you asked him today, he would have no idea how to get into his account, other than maybe going to Fidelity in person.

            He similarly has a Roth IRA that I started with him and matched his contributions over the years (about $20k) that he vaguely knows exists but again has little interest in managing or raiding.

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