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Author: JeanDavid Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121177  
Subject: Re: children's account Date: 3/26/2014 9:13 PM
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I am neither a tax accountant nor an attorney.

The age at which a UGTMA must be turned over varies from state to state. Here in New Jersey, it is 21.

I set up a such an account for a friend of mine soon after she was born. It is my understanding that I could take money out of it at any time (she is not related to me) provided it was for her benefit (not mine), so I could not put it in my checking account. I could spend it on things that her parents could not reasonably be expected to pay. For example, instead of paying college tuition that was my intention, I could pay some out for a drug treatment program if she needed it. Fortunately, my friend does not need a drug treatment program, and does need money for college and will surely spend it all before she is 21 on tuition, dorm rent, books, fees, etc.

So first find out if your state requires you to turn over the money at 18, or 21 (or perhaps some other age). Then check with an attorney in your state to see if what other than school expenses you can take the money out for. I do not know anything about Coverdell or College CDs, whatever they are, and I rather suspect that the answers to your questions will depend on the state you are in.
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