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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]The UTMA/UGMAs [b]have to get turned over to your kid when they hit age 18 or 21[/b], and you don’t have the ability to take back any of the funds you contributed. Doing the annual gifting as others have mentioned gives you more flexibility [/quote]

What happens if the kids are unaware of these accounts and you don't give them the userid/password for those accounts?[/quote]

It's fraud. The money is owned by them when they turn 18 and if you are keeping their own money from them, it is stealing from them. If they found out about it, they could sue you. [/quote]

What if the money remains in their account untouched or is spent for their college expense?

Would it be the same, say, with iBonds?  We have invested 10K in each of our kids' names (only because of the annual limits) and plan to continue to do this as long as the rates are good.  Kids are unaware of this and our plan was to 'surprise' them when they turn 25 or at some future point when they are mature adults assuming we don't need to tap these funds to pay for private college.  [/quote]

NP. It is still fraud even with iBonds. Because of UTMA accounts, we've had to file taxes for our kids for years, and they have had to sign the returns. When our kids recently turned 21 in MD, our brokerage firm was very pro-active in having the kids take sole ownership of the account, they do their best to make sure the law is followed. Finally, once a child graduates from college and is independent they are responsible for the taxes on the ibonds or any other type of investment, at that point it really becomes difficult and very ill-advised to hide an account. I wouldn't use UTMA's again, for one thing, there wasn't any tax advantage to using them b/c of the kiddie tax, and we had to race to spend much of the money down before age 21 on college. [/quote]

I don't think this is the case with ibonds.  You can put them in your "gift box" in your kid's name, keep them for years and then deliver them at any point.  The only issue is that you are using up their maximum contribution for the year you purchased them so you would need to have enough communication with them about that.  Since you don't pay taxes on ibonds until they are cashed it's not an issue.  But I'm not 100% sure about that.[/quote]

I'm the pp that asked about the iBonds.  That's my thinking as well.  If I invest 10K each year (as long as it makes sense to do so), starting with when the kids are minors and continue this through college years (say 6 years), I don't think I need to even tell them about it until after they reach an age that I think is appropriate for them to know.   In between, if I need the money for college, I could use these bonds, can't I?  Will that be considered fraud?

Of course, if the kid is going down a path I don't approve of (e.g. drugs, college drop out, etc.), I'll stop adding money in their name and just keep it in mine.  [/quote]

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