Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
I just got off the phone with a Schwab customer service representative who mentioned to me that she heard of a new "Custodial IRA". She did not know much about it since she just heard that the literature is available to order this week. I'm posting my question here to see if anyone has heard of this. If so, what's it about?

From what the representative was telling me, it sounds like an IRA for kids that can be funded by a custodian. Sounds too good to be true; but if it's true, I'm all ears!

Gracias . . . Ken
Print the post Back To Top
No. of Recommendations: 0
I just got off the phone with a Schwab customer service representative who mentioned to me that she heard of a new "Custodial IRA". She did not know much about it since she just heard that the literature is available to order this week. I'm posting my question here to see if anyone has heard of this. If so, what's it about?

From what the representative was telling me, it sounds like an IRA for kids that can be funded by a custodian. Sounds too good to be true; but if it's true, I'm all ears!

Sorry, this is simply a case where you were talking to a confused customer service rep. IRAs in general can be maintained by trustees or custodians. All the same rules apply to an IRA regardless of whether it has a trustee or custodian. I think the distinction is there mainly to overcome an issue under some state laws as to what types of financial institutions can serve as trustees.

A custodial IRA is not to be confused with a custodial account for minors -- a completely different animal which is not an IRA and which is established under the uniform gifts (or transfers) to minors act.

Kaye Thomas, author
Fairmark Press Tax Guide for Investors
http://www.fairmark.com
Print the post Back To Top
No. of Recommendations: 0
[[I just got off the phone with a Schwab customer service representative who mentioned to me that
she heard of a new "Custodial IRA". She did not know much about it since she just heard that the
literature is available to order this week. I'm posting my question here to see if anyone has heard of
this. If so, what's it about?

From what the representative was telling me, it sounds like an IRA for kids that can be funded by a
custodian. Sounds too good to be true; but if it's true, I'm all ears!]]

Sounds like an Education IRA. I discussed ED IRAs in the Taxes FAQ area (archives area). You'll get the highlights there.

TMF Taxes
Roy

Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. There is still time available to do that tax planning (and tax saving) before the end of the year. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Pay special attention to the "archives" section. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.
Print the post Back To Top