<p>Amen, Marian. If the money were in a 529 plan it could be moved between kids, but in a UGMA the money legally belongs to the child. Also, if a child is a candidate for financial aid (doesn’t sound like anyone with $100k of extra money laying around would be) funds in the child’s name count much more heavily than funds in the parents’ names.</p>
<p>Mominva, the kid doesn’t have to be 21. It is legally HIS money from the second it goes into the account. He just doesn’t have control over it yet. If the parent spends it they must show that it was spent for the child’s benefit. Once the kid reaches legal age (and the age varies between states, it’s not always 21) the kid controls the money and the parent can’t do a thing about it.</p>
<p>I used to work for a mutual fund company. Every year we would have people send us instructions to transfer money out of their kids’ UGMA to fund the parent’s IRA, and we would have to reject the instructions. I had people say to me on the phone, “But it’s not really my kids’ money. We just put it there to avoid taxes!” We also had teens that called pretending to be their parent, trying to liquidate funds out of a UGMA to buy a car or whatever. They’d get their friend with a deep voice to call and pretend to be the dad. It was usually pretty easy to sniff them out, and pretty funny.</p>