<p>The title on the account remains the same: a UTMA is owned by the child with the parent as custodian, since minors cannot hold financial instruments in their names. When the UTMA is transferred to a child-owned 529 (also known as a custodial 529 or a UTMA/529) then it’s still owned by the child with the parent as custodian. When the child reaches 18 or 21 (depending on the state) the account will no longer require a custodian and becomes property of the beneficiary. The difference between a child-owned 529 and a parent-owned 529 is that for a child-owned 529 the beneficiary cannot be changed, while for a parent-owned 529 the beneficiary can be changed.</p>
<p>As far as the kiddie tax, children must file taxes if their earned income is greater than $5,700 or their unearned income (like dividends and interest) is greater than $950. If interest plus dividends plus other investment income total more than $1,900, part of the child’s income will be taxed at the parent’s tax rate instead of the child’s tax rate.</p>