<p>There is nothing fraudulent or law breaking about this. Nothing the least unethical. If anone is making the assumption that there is some attemp to 'get away' with something they are totaly wrong. I am just trying to figure out what options may be available in this type situation.</p>
<p>bhg, I am not suggesting at all that you are doing anything wrong. Some people have given you advice that was based on what seems reasonable or logical, ie correcting your husband's mistake, gifting the money back, borrowing it back, etc. I am merely pointing out that what is reasonable and logical is also sometimes a technical violation of the law.</p>
<p>The funny thing is I have joint accounts with each of my children, and never thought myself of these consequences. In fact, I have gone into the bank with my kids and taken out various sums of money ranging from $25.00 to $500.00 for all sorts of reasons. Here is an informative article I found that sheds some light:</p>
<p>What To Do If You Have a UGMA</p>
<p>By Ric Edelman
From The Truth About Money</p>
<p>Unfortunately, many parents perhaps including you already may have established a UGMA for your child. Creating such an account constitutes an irrevocable gift, and legally you cannot cancel the account and return the money to your own name. (Doing so would annoy the IRS, so dont do that.)</p>
<p>What, then, can you do?</p>
<p>Heres the solution: Remember that under a UGMA, the assets belong to the child, and the law requires that the assets be used for the benefit and welfare of the child. Most parents think this means the money can be used only for college expenses, but thats not so. In truth, money in a UGMA can be used for almost anything provided anything is for the benefit and welfare of the child.</p>
<p>After all, your child needs clothes, food, shelter, education, and medical care, and theres nothing in the UGMA rules that say you cant use the childs assets to pay these expenses. For example, say you take your child to the doctor for her annual check-up and the bill is $200. Instead of paying for that yourself, withdraw $200 from the UGMA account and use that money to pay the bill. Simultaneously, send $200 of your own money into an investment (in your name) that is similar to the one used by the UGMA.</p>
<p>In this manner, youll slowly erode the value of the UGMA, while building assets in a new account in your name. If you pay for all of the childs expenses through the UGMA, such as private school, camp, music lessons, clothing, even their portion of food, shelter, utilities, and insurance costs, you ought to have no problem eliminating that account well before the child is 18.</p>
<p>Keep good records and maintain receipts to show the IRS (if they ask) that the money you withdrew from the UGMA was used for the direct benefit of the child.</p>
<p>And dont get carried away: Liquidating a UGMA to buy yourself a new car to chauffeur the child to soccer practice is unlikely to win IRS approval. If in doubt about the validity of any expense, ask your tax advisor.</p>
<p>We certainly want to avoid that! As said there is probably very little consequence on the forms or end result in aid as a result of putting the money in this account. It wasn't the best thing to do to maximize S's chances at aid but he probably wouldn't come up with much anyway. But will check this all further.Thank you.</p>
<p>BHG, I was really too hasty with my advice. We really do not know what kind of account it is, when you put in the money, how much money and how old is the child. All of these things can make a difference on what you can do.</p>
<p>BHG: If you won't be getting need-based financial aid, it won't matter. But tell us, what kind of account is this child's? A regular savings account? An UGMA? The advice will change accordingly!</p>
<p>UGMA and he's a junior. This is THE year they will use to calculate.<br>
So.....does anyone know good LAC 's who give good merit aid without the finaid info? (sniff, sniff)</p>
<p>When did H put in this bonus? Talk to the those administering the UGMA about what you can do. I can give you a list of some LACs with merit aid, if you give some info on the student and what he wants, needs, geographics, stats so far, etc.</p>
<p>You cannot withdraw money from a UGMA account for expenses a parent is expected to provide for a child, such as shelter, food, clothing, etc. Ordinary expenses for public school could not be withdrawn from a UGMA account, either. So don't bother to save receipts for pizza, pencils, or shoes. However, expenses for private school tuition, a computer, college, or a car could be.</p>
<p>He put it in last week. In fact, after all this online chat I called husband and we talked aobut it and I'm calling the fund tomorrow.
This is #4 - he is all around doing well in all honors, Cal. Physics, English.</p>
<p>sorry, I hit the button by mistake, honor roll 3.6 or 7 , 115/650 AP's in English, Bio and Cal next year.</p>
<p>If the fund managers recognize it as a bonafide mistake and will document it as such, it should be allright since it was just done, and caught quickly. If it were a few months ago, and you let a statement or two go by, it could be a problem. Mistakes do happen. As I stated earlier, I have pulled som bloopers with checks and deposits to the wrong accounts.</p>
<p>Hey! They are sending the check back! I would have let the whole thing slide if had not posted, so thanks, it may make a difference- but maybe not .</p>
<p>phewwww!!!! The difference is in the details! I had a mental picture of your H walking into a bank and depositing a check on the spot. But mailing a check to a mutual fund company? How nice that they could locate the uncashed check and return it! No harm = no foul. :)</p>
<p>Something tells me NJres you may be in the business? I still will look into withdrawing for a car- different perspectives on that issue! thanks.</p>
<p>Gosh, that was a little too exciting, BHG. Glad the 'check was in the mail' this time!</p>