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Over the years we've been able to put some a few thousand away (custodial accounts) in mutual funds (Templeton World I & Aim Constellation) for our twins who are going to school next fall.

I'd like to know if there is anything I should know about withdrawling the money. Should the accounts become theirs (they will be 18 in June)? Can it be used for anything college related - application fees, books. Does is expenditure need to be carefully documented for other reasons, etc.

Thanks,
Tim
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No. of Recommendations: 2
I'd like to know if there is anything I should know about withdrawling the money. Should the accounts become theirs (they will be 18 in June)? Can it be used for anything college related - application fees, books. Does is expenditure need to be carefully documented for other reasons, etc.


First of all, whether or not the money becomes theirs at 18 or 21 depends on your state so you may want to check into it. I actually planned to turn over money to my daughter at 18 and couldn't because it was 21 in our state. Here's the best guide I've found on UGMAs :

http://fairmark.com/custacct/index.htm

How you handle it probably depends on your intended use of the money. Will you be eligible for the Hope tax credits ? Need-based financial aid ? Do you have large gains ? All of these would impact my opinion on what I would do in your situation.

rad
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