I have two kids, a 17 year old who probably will go to college and a 14 year old who definitely will. Each has a UGTMA account, a Coverdell account, and a college CD (like a 529). I am concerned that my 17 year old is almost 18 (which puts him in control of the UGTMA account and perhaps the other two) and can't be trusted with the money. I don't want him to cash out these 3 accounts to buy drugs. However, I am concerned that it is against the law to remove the money from these accounts because the accounts are in his name, with me as custodian. I would like to liquidate the accounts and put the money into my checking or savings account so that he can't use it for drugs and so that I could pay the college myself if he does go to college. I don't want to break any laws or get audited by the IRS, but I have worked very hard for this money and don't want it used to feed a drug habit. I don't know if a Coverdell or a college CD can be transferred to the 14 year old, but I suspect the UGTMMA one can't be transferred. I'd appreciate some advice. Thank you.
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