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Originally Posted by lookout123
UTMA/UGMA accounts basically allow you to maintain control of the money until the child's 18th birthday. On that day you lose all control of the funds and cannot regain it. The child can choose to buy a hummer (of any variety) and there is nothing you can do about it. Also, although rare, there is precedent for the Custodian of the UGMA account being sued for not making prudent investments for the benefit of the child. Think about a vindictive now-exwife who doesn't think ex-hubbie should have bought XYZ stock.
In short UGMA's are not a "shelter" for money. they are a way of putting money aside for kids, usually for college. The growing popularity and additional control of 529 plans have seen the UGMA concept fall to the wayside for most people.
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Well I have one for my dau, who is in college, and because I never signed over the account to her, and she does not know it is legally her's, I am still the custodian and she cannot get money out of it without my consent. She is 20 years old. I want to keep it that way. It was my money that was saved and earned over the last 18 years, and since it is a big chunk (30k) I want to be sure it is used for her when she is in school for things I think are worthy. When she graduates I will use the balance to pay down the school loans we took out for her to go to school. Our other kids have only 529's and oldest has one as well that we have not tapped yet. 529's have a more limited use defined but can be rolled over from one kid to the next if they are not used.