Anonymous wrote:

Anonymous wrote:

Anonymous wrote:honestly i just don't see to point in contributing to these accounts. not worth the hassle for how low the contribution limit is.

huh? the split gift maximum is 38k before git tax is triggered. Your idea of “low” is not mine.

That is what I was thinking.
12 yr old's is just under 100K and 16 yr olds is at 125K. no idea when we'll transfer as their financial decision making is horrible right now. They also have a regular bank account and their spending habits are not great. Upside is they are generous with friends?

If the money is in an UTMA it does to them at 18 years old.

My mom set up UTMA’s for my nephews when they were little.
They turn 18 this year and we’ve realized what a horrible idea that was. Live and learn.

We didn’t bother. We did a 529 for savings when they were young and then when were able to cash flow part of college education we let the kids withdraw from the 529 and put it in a brokerage account.

Anonymous wrote:

Anonymous wrote:honestly i just don't see to point in contributing to these accounts. not worth the hassle for how low the contribution limit is.

huh? the split gift maximum is 38k before git tax is triggered. Your idea of “low” is not mine.

That is what I was thinking.
12 yr old's is just under 100K and 16 yr olds is at 125K. no idea when we'll transfer as their financial decision making is horrible right now. They also have a regular bank account and their spending habits are not great. Upside is they are generous with friends?

11 year old

UTMA 30k
529 550k

We can’t contribute anymore to 529. We will continue contributing to UTMA only a few thousand a year. The UTMA is to help launch DS either as help towards down payment for 1st condo, car, or whatever expenses he needs help with when done with college. Or he can continue keeping money in there with stocks.

10 year old 70K in UTMA account

I opened UTMA account when our child was born in Vanguard, we are just putting in it all the checks/cash coming from birthdays, grandparents. We don't put any of our money into it as parents. Our child has no clue about this account and we won't tell her until she old enough and responsible with money.

We focused on 529 contributions until we felt that we could cover education costs. Then we gradually started contributing to UMTAs. The poster who mentioned contribution limits is mistaken. I presume they just meant having to prepare a gift tax return (but maybe not). Either way, we have been dollar cost averaging for years in each UMTA. Our goal is to have enough invested in each account so that when we retire we can say to our kids, “here is the money we have set aside for you” and then we can focus on our own spending. Whatever they inherit is what they inherit. By using UMTAs, they will be in a lower tax bracket at 18 when they take custody of their accounts, and will be able to sell down their portfolios if necessary to finance their first apartment or house. Or ideally they keep investing. We hopefully raised them right for them to respect money and what it takes to build up a nest egg.

Each kid gets a 529, a Savings account, and either their own brokerage or Roth IRA account As a teenager they get a checking account. At 18, they become joint accounts.
Balances in their Savings and Checking Accounts are intentionally kept at a lower reasonable level and they have access to see and manage these.

They know they have a 529 and other things coming to them, but don’t know the balance nor do they manage.

We teach them Save, Spend, Invest, Give.

We started them once we felt their 529s were sufficient. Our 10 year old has $30k and 13 year old has $50k.

Anonymous wrote:We just put all monetary gifts they’ve received since birth in them. We don’t contribute. The 15 yo adds her babysitting money. Most of it is invested in ETFs.

10: $27k
15: $34k

Please do some additional bragging about who is gifting your kids $2500+/ year.

This thread is bonkers! (And I’m rich.)

Anonymous wrote:honestly i just don't see to point in contributing to these accounts. not worth the hassle for how low the contribution limit is.

huh? the split gift maximum is 38k before git tax is triggered. Your idea of “low” is not mine.

is a UTMA the same as custodial accounts? if so we have Roth IRA for our kids and regular brokerage accounts. Our kids knew about them when they were young and helped make investment decisions. It was integrated into our financial literacy education. our kids are adults now and manage themselves, though we have always contributed the max roth amount as a gift each year. No idea the balances now.

^^^ Should have written donut hole or below.

Be sure UTMA/UGMAs are appropriate for your family before using them.

If you're likely to be donut hole, UTMA/UGMAs are treated as the kid's assets for FAFSA/CCS purposes.

See https://howtopayforcollege.com/blog/utmas-and-the-fafsa


Also, above a fairly low income (can't remember the amount), the income gets taxed at the parent's rate.

Anonymous wrote:honestly i just don't see to point in contributing to these accounts. not worth the hassle for how low the contribution limit is.

What contribution limit? There’s no limit

Anonymous wrote:

Anonymous wrote:honestly i just don't see to point in contributing to these accounts. not worth the hassle for how low the contribution limit is.

???
The contribution amount is basically unlimited if you’re creative. A $180,000 balance of all VTI in a UTMA turns off ~$2,700 in dividends yearly which is taxed at 0% under current law.

+1