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A number of years ago, I opened Custodial Accounts for my 2 grandchildren. I did this through a DRIP program with JNJ. This falls under the rules for UTMA (or whatever your favorite acronym in your state is) - or where I am the custodian and the grandkids own the assets.

A few years ago I then opened Coverdel IRAs for them. These replaced the old Educational IRAs and allow up to $2K per year vs. the old $500 in the Educational IRA.

Now, I would like to get the $$ from the JNJ Custodial Accounts and add it to the Coverdel IRAs. From what I have been able to find and what I've been told...
- I can't transfer the funds from the Custodial Acct to the Coverdel IRA.
- If I sell the stock in the custodial account, the assets belong to the kids even though I'm the custodian. Also, since they are minors and living with their parents, any tax consequences from the sale in the custodial acount will be on the grandkids parents (my daughter & son-in-law).

Any suggestions, clarifications, etc. ??

Thanks,
Terry
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