UTMA account for minor
We are guardians for my grandson. His mother passed away and he has a Illinois UTMA with Northern Trust as a Result of an insurance policy that was issued. Can the funds in this account be transferred or removed to be placed into a higher interest account in another bank? Or can the funds be invested in some stocks or bonds?
Terry Says
Is the bank the “trustee” for his account, as determined by a court? Or are you the complete trustees for this account?
If you’re the trustee, you can move the money to any bank or financial institution. A new account should be opened and the money wired to the new account.
BUT — and I’d suggest you check with a lawyer re the terms of the will — if this money is to be used for college, and you are the trustees, you could open a 529 College Savings Plan with at least a portion of the money. Then it would be invested based on his age, to grow tax-free for any college in any state.
Read this article on 529 plans.
Money in an UTMA account weighs 7x more heavily against the child in any financial aid decision. AND, the money will belong to the child in Illinois at age 18! You (and his late mother) may have intended it for college, but he could buy a Porsche!! Good reason to investigate the Illinois Bright Start 529 plan.
