Are Your Kids’ Accounts Still Set Up the Right Way?

When your children were young, choosing where to save money for their future felt simple. Many parents opened UTMA accounts, a straightforward way to set aside gifts, savings, and early investments in a child’s name. But as your children become teenagers and young adults, something else grows with them, the accounts, the opportunities, and the questions.

Parents begin to wonder whether the accounts they set up years ago still align with their long-term goals. Recently, I met a family who reminded me just how important these decisions are, and how meaningful even the “small” choices can be.

A Real Family Story, Three Kids, Working Parents, and a Son With a Growing Passion

Not long ago, I met an incredible family with three children. Both mom and dad work full time, and like many parents, they are trying to balance teaching responsibility, supporting passions, and planning wisely for the future.

Their youngest son, just ten years old, recently began working with a local firm doing digital marketing projects. He is remarkably talented, and the business pays him monthly for his services. As his parents proudly told me, “the money is starting to add up.”

What they were not sure about was just as important, “Where should we put this money? What account is right for him?”

They had explored several options:

• A checking account at a credit union
• A high interest savings account
• An UTMA
• A 529 plan
• Even a small business account

But they were not choosing an account for convenience, they wanted to protect the money for education, business tools, and ways to help fuel their son’s passion.

As advisors, we sometimes forget that while these may be small questions to us, they are deeply meaningful to families. This was one of those conversations where the goal was not to jump to an answer, it was to understand.

• What the parents wanted
• Why the account mattered
• What level of control they needed
• What the son might need when he is older

One powerful option we discussed was simply opening a brokerage account in the parents’ names with a transfer on death designation to the son. This allowed:

• The parents to maintain full control
• The funds to be invested and grow
• The money to be used intentionally
• A smooth transfer later, when the son is mature enough

Why Many Families Re Evaluate UTMA Accounts

1. Control ends early, the child legally takes ownership at age 18 or 21.
2. Funds must benefit the child, but there are no requirements for how.
3. You cannot reclaim or restructure UTMA funds once deposited.

Modern Alternatives to Consider

1. UTMA and UGMA Accounts, child control at 18 or 21, good for modest balances.
2. 529 College Savings Plans, parent retains control, tax free growth for education.
3. Parent Owned Brokerage Accounts, full parental control, flexible long term planning.
4. Roth IRA for Kids, ideal for teens with earned income, long term retirement growth.
5. Gift Trusts (Irrevocable), best for high net worth, multi generational planning.
6. Revocable Family Trusts, great for centralized, simplified estate planning.

How to Decide What’s Best for Your Family

• What is the purpose of the money?
• How much control should the child have, and when?
• What is your tax situation?
• Do you need flexibility or structure?
• Are you planning for one generation or more?

For Families With One Million Dollars or More in Liquid Investable Assets

• Education strategy
• Tax planning
• Family governance
• Trusts and estate design
• Multi generational structures
• Wealth transfer timing

Your Children Grow. Your Opportunities Grow. Your Planning Should Too.

If you are re evaluating accounts for your children, UTMA, 529, trusts, or parent owned brokerage accounts, we are here to help guide the conversation without pressure.

Because sometimes the smallest decisions are the ones that matter most.