bots2019
Recycles dryer sheets
- Joined
- May 16, 2007
- Messages
- 128
I have a wealthy relative (age 85+) who has recently begun gifting money to a number of her heirs. This includes my son, who is an infant. For 2007 we put the full gift into a 529 plan for college.
For the 2008 gift we are planning on putting the majority of the gift into a 529 and the remainder into a custodial account. My understanding of custodial accounts is that monies in that account can be administered by the custodian (me), but should fall outside of a parent's 'support obligation'. My interpretation of this is that the funds couldn't be used to buy diapers or food, for example, but could be used for 'extras' (music lessons, etc).
Because I currently have a brokerage account with WellsFargo, they would set up a custodial account and waive all fees. However, I was told that they cannot set up custodial accounts as checking accounts for minors <13 years of age (they can be set up as savings or brokerage accounts). I believe this is a company policy, as opposed to a federal requirement.
What I'd ideally like to do is open a brokerage account either with a linked money market (w/ checks) or a linked checking account. That way I could invest a portion of the funds and use a portion to pay for the 'extras'.
Has anybody done this? Thoughts?
Thanks!
For the 2008 gift we are planning on putting the majority of the gift into a 529 and the remainder into a custodial account. My understanding of custodial accounts is that monies in that account can be administered by the custodian (me), but should fall outside of a parent's 'support obligation'. My interpretation of this is that the funds couldn't be used to buy diapers or food, for example, but could be used for 'extras' (music lessons, etc).
Because I currently have a brokerage account with WellsFargo, they would set up a custodial account and waive all fees. However, I was told that they cannot set up custodial accounts as checking accounts for minors <13 years of age (they can be set up as savings or brokerage accounts). I believe this is a company policy, as opposed to a federal requirement.
What I'd ideally like to do is open a brokerage account either with a linked money market (w/ checks) or a linked checking account. That way I could invest a portion of the funds and use a portion to pay for the 'extras'.
Has anybody done this? Thoughts?
Thanks!