Custodial accounts can be a great way to get around estate taxes, especially in states with limits significantly below the federal threshold. UTMAs can offer some marginal short-term tax savings, but lack many of the advantages of 529s when it comes to saving for college.
Alvin Carlos of District Capital Management joins Michael to discuss the benefits and drawbacks of opening a custodial account for your child.
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Episode Highlights
- Overview of custodial accounts and a comparison the UTMA and UGMA structures.
- Discussion of the tax benefits associated with UTMAs.
- How UTMAs and UGMAs can be used to avoid estate taxes.
- Common mistakes made with custodial accounts, and how to avoid them.
- Additional benefits of UTMAs, including the ability to teach financial literacy to children.
Episode Resources
- UTMA Tax Savings Calculator
- Episode 9: Why Your Child Needs A Roth IRA
- UGMA vs UTMA: Which Is Better?
Today’s Guest: Alvin Carlos, District Capital Management
- District Capital Management – Official Website
- District Capital Management on LinkedIn
- District Capital Management on YouTube
- Alvin Carlos on LinkedIn
About The Uncommon Advisor Podcast
The Uncommon Advisor podcast features insights from advisors who are embracing a modern and holistic approach to wealth management. Learn how the most creative minds in the industry are innovating their practices to deliver superior client results, generate new business, and maximize retention.
