M1 Custodial Accounts

Someday,
they’ll thank you

With many years ahead to build wealth, adults are in a great position to set children in their lives up for financial success. That’s where M1 Custodial Accounts come in.
 

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Give a child a strong start

A financial gift

UTMA/UGMA accounts allow you to invest on a child’s behalf and help prepare for future financial needs. These funds can be used for anything benefiting the child.

There when they need it

As a custodian to the account, you control the investment strategy until its beneficiary comes of age (age 18 to 25, depending on your state).

Time is on their side

Investing early on a child’s behalf helps give them a financial advantage compared to those who begin investing in adulthood.

What you need to know 

Custodial Accounts

Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) are custodial accounts created under a state’s law to hold gifts or transfers that a minor has received. If you’re not sure what type of account is best for you, consult a professional tax advisor or financial advisor for one-on-one guidance. Learn more about UTMA/UGMA accounts. 

529 plans are specific to higher education costs. Custodial (UTMA/UGMA accounts) are not specific to educational savings (although the funds in a custodial can be used for education). Funds saved in a 529 plan and used for higher education have tax benefits, whereas funds in a custodial account that are used for education do not come with tax benefits for educational costs. 

Any withdrawal from a custodial account must be for the use and benefit of the minor. There cannot be transfers initiated from the custodial account directly to another M1 Invest account unless through M1 Spend or the user’s external bank account. 

The age of majority can range from 18 to 25 years old and varies based on your state of residence. You may want to ask a financial consultant about the laws in your state. 

Any funds used prior to the age of majority must be used for the sole benefit of the minor. Unlike college savings plans, there is no penalty if account assets aren’t used to pay for college. Once the minor reaches adulthood, the money is turned over to the minor and the minor will have full control of the assets and can use them for any purpose—educational or otherwise. 

Total control, total automation for your wealth today and tomorrow.

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