Custodial Accounts
Learn about custodial accounts for minors - how they work, tax implications, and when children gain control. Explore UTMA vs UGMA differences and setup options.
What happens when my child turns 18 with a custodial account?
When your child reaches the age of majority (18 or 21 depending on your state and account type), they automatically gain full control of the custodial account. This means they can withdraw all funds and use them for any purpose - not just education. As the custodian, you lose all authority over the account at that point. Many parents don't realize this transfer of control is automatic and irrevocable, which is why some choose alternatives like 529 plans or trusts for larger amounts.
