The Ultimate Guide to Legalities for Custodial Accounts

In 1993, a Pennsylvania mother opened a custodial account for her daughter with $1,570, then added $385 more between 1996 and 1998. By December 2000 it had grown to $5,601.37. That month, soon after her daughter left college within weeks of starting and moved in with her father, the mother closed the account and kept the money. She said it repaid her for braces, a car, a class trip to France, and college fees she had already covered. Her daughter learned the account existed only when her mother sent her a tax form for the closing, showing she owed tax on an account she hadn’t known about.

The daughter went to court and won. The judge ordered her mother to pay her the account’s full value, $5,601.37, plus interest, and in December 2003 the Superior Court of Pennsylvania upheld that order in In re Gumpher.

The case captures the rule at the center of every custodial account: once money goes in, it belongs to the child, no matter who deposited it or what they meant it for. This guide explains the law behind that rule, including who owns a custodial account, what the custodian can and can’t do, how the law protects the money, and what happens when the account changes hands. It’s the hub for our section on legal protections, part of The Ultimate Guide to Building a Generational Nest Egg for Your Child.

What a custodial account is, legally

A custodial account holds property that legally belongs to a minor but is managed by an adult, the custodian, until the child reaches an age set by state law. Today these accounts are created under the Uniform Transfers to Minors Act (UTMA), a model law adopted in all 50 states, the District of Columbia, and the U.S. Virgin Islands and used for millions of accounts, according to a September 2026 update in the American Bar Association’s Probate & Property magazine. Some older accounts still follow its predecessor, the Uniform Gifts to Minors Act (UGMA), and UTMA vs. UGMA: What’s the Difference? explains how the two compare.

The law is specific about how an account comes into being. Money becomes custodial property when it’s deposited to an account in the custodian’s name, followed by words to the effect of “as custodian for [child’s name] under the [state] Uniform Transfers to Minors Act,” under the model act as South Carolina enacted it in 2022, complete with the Uniform Law Commission’s official comments, which this guide relies on throughout. The custodian can be the person giving the money, another adult, or a trust company. Because the account isn’t a separate legal entity or taxpayer, the drafters explain, it should be identified by your child’s taxpayer identification number, usually their Social Security number.

Each account has exactly one child and one custodian, and every later deposit that custodian receives for that child, from any source, joins the same account. Married couples often ask to serve together as co-custodians. The drafters of a 2026 update to the act considered it and said no, citing the disputes two custodians could have over investments or withdrawals and the problems a later divorce would cause, the ABA reports.

An account also stays under the law of the state named when it was created, even if the family, the custodian, or the money later moves, the act provides. That matters, because states differ on details such as the age when your child takes over.

The core rule: every deposit is an irrevocable gift

Under the act, a transfer to a custodian is irrevocable, and the property is indefeasibly vested in the child, meaning the child’s ownership can’t be undone. The custodian gets broad powers to manage the money, but no one gets it back. FINRA, the brokerage industry’s regulator, says the same thing in Regulatory Notice 20-07: depositing assets into a custodial account is an irrevocable transfer from the giver to the child. In practice, that means:

• You can’t take the money back, even if you were the one who put it in.
• You can’t move it to a brother or sister, or into an account in your own name.
• You can’t change the beneficiary, the way you can with a 529 plan.
• Gifts from grandparents and other relatives become your child’s property in exactly the same way.

The Gumpher court put it simply, citing earlier Pennsylvania cases: whatever its source, custodial property is the child’s. Courts read the rule strictly in the other direction, too. In 2003 the Supreme Court of Iowa held in In re Marriage of Rosenfeld that a gift under the act isn’t a trust. The giver gives up title, the gift is irrevocable, and the parents’ plan to use the money for college didn’t legally limit it to college.

If you want money that can only be spent on school, or that you can redirect to another child, a 529 plan is built for that. Federal law treats a 529 contribution as a completed gift to the beneficiary, yet the account owner can switch the beneficiary to another member of the family without a tax hit, under Section 529 of the tax code. The owner can also withdraw the money for other purposes, though the earnings are then taxed as income and may face a 10% penalty, Fidelity notes. The Complete Guide to 529 College Savings Plans covers the details.

Who owns the account, and who controls it

Ownership and control are split. Your child owns everything in the account, but until the handoff, the custodian has all the rights, powers, and authority an unmarried adult has over their own property, and may use them only in the role of custodian. The drafters chose broad, simple powers so the law would be easy to follow for the volunteers who most often serve as custodians. Your child, meanwhile, has no say over the account before the handoff, except through rights the act grants, most of which begin at 14.

One consequence surprises many parents: your brokerage won’t police your withdrawals. A bank or brokerage that acts in good faith on a custodian’s instructions isn’t responsible for judging whether a withdrawal is proper, unless it knows otherwise, under the act. A transfer going through doesn’t make it legal. The custodian answers for it later, sometimes in court.

The custodian’s legal duties

A custodian is a fiduciary: someone legally bound to act for another person’s benefit. The act spells out the job:

• Take control of the property, and register or record it in the custodian’s name where that applies.
• Invest it with the care a prudent person would use with someone else’s property, and use any special expertise the custodian has.
• Keep it separate from all other property, clearly identified as the child’s.
• Keep records of every transaction, including the information needed for the child’s tax returns.
• Make those records available at reasonable intervals to a parent or the child’s legal representative, and to the child once they’re 14.

The drafters called this standard somewhat stricter than the older law’s, because it asks how a careful person would handle someone else’s property rather than their own. Some states have since moved custodians to their prudent investor rules, which judge a portfolio as a whole. Virginia did in 2007.

A case that shows what’s at stake

Carlson v. Wells, decided by the Supreme Court of Virginia in January 2011, shows how these duties play out. A divorced father served as custodian of most of his three children’s accounts. In December 2003 his son, then in high school and choosing colleges, logged in to check on the college money and found it had been withdrawn, and his requests to see the records went unanswered. The father had merged the children’s accounts into one, moved money into his own investment accounts, and used $40,000 of their money, along with some of his own, to buy US Airways stock shortly before the airline sought bankruptcy protection in 2002.

The court held that buying a stock he knew was in trouble was speculation that broke his duty of care, and that under the rule in force at the time, each investment was judged on its own, so gains elsewhere didn’t excuse the loss. Because he had mixed the children’s money with his own, he had to prove that each withdrawal was proper. The court also faulted him for refusing to let his son see the records, for claiming a personal tax deduction for a charitable gift paid from the children’s money, and for reimbursing himself out of their funds for a child support payment. He and an uncle who had served as custodian of other accounts were ordered to pay $43,910.88 in damages to the three children, plus $33,102.03 in attorney’s fees, commissioner’s fees, and costs. The justices said the father had never grasped that he was the custodian of property his children owned, not a father investing his own money for them.

Your child’s legal rights start at 14

The act gives a child real legal standing at 14. From that birthday on, your child can:

• Inspect the custodian’s records.
• Ask a court to order spending for their benefit.
• Receive written notice if the custodian resigns.
• Choose a successor if the custodian dies, becomes incapacitated, or becomes ineligible without having named one.
• Ask a court to remove the custodian for cause.
• Ask a court to order a full accounting.

Fourteen is also a natural age to start reviewing the account together, and Middle School (Ages 11-14) shows how to run a yearly portfolio review with your child.

What custodial money can and can’t pay for

The custodian may spend as much as they consider advisable for the child’s use and benefit, without a court order and without regard to anyone’s duty to support the child, under the act. But the same section adds a limit: that spending is in addition to, not a substitute for, any person’s obligation to support the child. The drafters deliberately replaced the older law’s narrower wording, which tied spending to the child’s support and education, so no one would read the money as meant only for basic support. That limit has been litigated often over the past 30 years, the ABA notes.

The limit matters for taxes, too. The IRS has long taken the position that income from custodial property, to the extent it’s used for a child’s support, is taxable to whoever is legally obligated to support the child, whether or not that person is the custodian, the official comments explain.

Courts have drawn the line case by case. Pennsylvania’s Supreme Court held in Sutliff v. Sutliff in 1987 that custodial money can’t be used to meet a parent’s support obligation when the parent can afford to meet it, and the Gumpher court applied that rule to both parents, married or not. Gumpher added a second rule that trips up well-meaning parents: spending should come straight from the account, or be reimbursed at or very near the time of the expense, not years later.

The most detailed example comes from New York. In Wagman v. Wagman, a mother had withdrawn more than $140,000 between 1997 and 2003 from custodial accounts she had set up and funded for her son, reimbursing herself across 29 categories of expenses. In December 2007 a Westchester County judge went through them one by one, approved $30,271.67, and entered judgment for her son of $116,976.76. The table pulls together rulings from that case and the three described above.

Each case applied its own state’s law to its own facts, so treat these rulings as examples, not rules for your family.

Two lessons run through these cases. First, what counts as support depends on your state’s law and your family’s agreements. In Wagman, sports fees were off-limits because New York treats extracurricular costs as part of child support, and an earlier ruling in the same case made tutoring, eyeglasses, and summer camp the mother’s responsibility under her separation agreement. Second, records decide close calls. The custodian carries the burden of documenting each withdrawal, and the Wagman mother had to repay every dollar of piano lessons she couldn’t back up with checks.

A few habits keep a custodian on safe ground:

• Pay for extras directly from the account, when the expense happens, and keep the receipt.
• Don’t cover basics a parent owes, such as food, everyday clothing, housing, health care, and child care.
• Never pay allowances, chores, or child support out of the account.
• Never move the money into your own account, pledge it for your own loan, or mix it with your own money.

When a custodian misuses the account

A child whose custodial money was misspent has real remedies, and so do the people around them. Under the act, the child at 14 or older, the child’s guardian or legal representative, an adult member of the child’s family, or anyone who gave to the account can ask a court for an accounting. Many of the same people can ask a court to remove the custodian for cause and name a successor. The act sets no special deadline for seeking an accounting after the handoff, because a child might not learn about a custodian’s failure to turn over the money until long after reaching adulthood, the drafters explain; ordinary statutes of limitations apply instead.

Courts can order a custodian to repay what was misused, and more:

• In Gumpher, the mother had to pay back the account’s full value, plus interest from the day she closed it.
• In Rosenfeld, a father who put $40,000 from his daughter’s called bonds into his own checking account in 1995 was ordered to pay $51,692.85 into a new custodial account for her: what remained after a $1,426 credit for taxes he had paid for her, grown at 5% a year through 2001. He got no credit for money he had spent on her from his own pocket, including more than $13,000 on her bat mitzvah, and he lost his role as custodian of that account.
• In Carlson, the custodians also had to pay the family’s legal costs, which the court allowed because they had shown a pattern of disregarding their duties.

If you suspect a custodian is misusing your child’s account, or you’re a custodian unsure whether an expense is allowed, a lawyer in your state can tell you how your courts draw the line. Asking before you spend is far cheaper than defending a withdrawal later.

Legal protections for your child’s money

From the custodian’s creditors

Because the money belongs to the child, a properly titled custodial account is generally out of reach of the custodian’s personal creditors. In Jimenez v. Brown, a North Carolina appeals court let judgment creditors attach a man’s safe deposit boxes and bank accounts, except the account titled to him as custodian for his son under the state’s UTMA, which belonged to the boy, North Carolina Lawyers Weekly reported. Two other accounts for the same son didn’t qualify: a revocable trust account the father fully controlled, and a joint account he held with the boy, opened when he was 9.

The protection has limits. Money moved into a child’s account to dodge creditors can be pulled back. In Boyer v. Belavilas, a federal appeals court held that money a couple had wrongly diverted from creditors into their sons’ custodial accounts had to be repaid from those accounts, though the boys themselves weren’t personally liable, Wisconsin Law Journal reported.

From your child’s own creditors

A custodial account isn’t shielded from your child’s own debts. The drafters considered adding spendthrift protection, which keeps a beneficiary’s creditors away from trust money, and rejected it. Their comments note that a judgment creditor of the child could reach custodial property anyway, and that the money can be used to pay the child’s legally enforceable obligations, such as taxes or a claim from an injury the child caused. In most cases, claims tied to the account are paid from the account itself, and neither the custodian nor the child is personally liable unless personally at fault.

In a divorce

Courts generally treat a properly created custodial account as the child’s property, not the parents’, so it isn’t divided in a divorce. In In re Marriage of Nevedrova, decided in October 2024, a Colorado trial court had split a $132,950 account held for a couple’s child equally between the parents. The Colorado Court of Appeals reversed, joining courts in Ohio, Missouri, North Carolina, and Indiana in holding that such an account isn’t marital property. But it sent the case back, because nothing in the record showed the money had been deposited with the required custodial wording, even though the father’s statements labeled the account UGMA_UTMA. The court also noted that while the father had asked to hold the money until the child turned 18, Colorado’s act doesn’t hand it over until 21.

The lesson: keep your account-opening paperwork, because the title is what proves the money is your child’s. Protecting Assets in the Event of Divorce covers custodial accounts and 529 plans in a separation, including who keeps the custodian role.

If the custodian dies or can’t serve

The account stays your child’s if the custodian dies. The question is who manages it. Under the act, a custodian can name a successor at any time by signing and dating a written designation in front of a witness who isn’t the successor. The successor can be a trust company or any adult other than someone who gave the account a gift. If no successor was named, a child who is 14 or older can choose an adult family member, a conservator, or a trust company. If the child is younger, or doesn’t act within 60 days, the child’s conservator takes over, and if there isn’t one, a family member or other interested person can ask a court to appoint a successor. Naming Successor Custodians walks through how to set one up.

If your child dies before the handoff

If the child dies before the handoff, the custodian must transfer the property to the child’s estate, under the act. It doesn’t return to the person who gave it.

Taxes, gifts, and financial aid

Because the account is your child’s, its income is your child’s for tax purposes, and the kiddie tax can apply. In 2026, the first $1,350 of a child’s investment income is tax-free, the next $1,350 is taxed at the child’s rate, and income above $2,700 is generally taxed at the parents’ rate, under Revenue Procedure 2025-32. Navigating the 2026 Kiddie Tax Thresholds explains the filing rules.

Every deposit is also a gift from whoever made it. In 2026, the annual gift tax exclusion is $19,000, according to the IRS, so two grandparents can each give a grandchild $19,000 in the same year. Larger gifts mean extra paperwork for the giver, which The Impact of the 2026 Gift Tax Exclusion explains.

There’s also an estate tax wrinkle. The IRS takes the position that if the person who made a gift serves as custodian and dies before the handoff, the account counts in that person’s taxable estate, the official comments note, citing rulings back to 1957. The drafters went further, calling it generally inadvisable for a giver, or a parent of the child, to serve as custodian. With a federal estate tax basic exclusion of $15,000,000 for people who die in 2026, few families will ever owe estate tax because of it. Still, for a large gift, such as a grandparent’s, naming someone other than the giver as custodian is an easy precaution, and Discussing Wealth with Grandparents can help with that conversation.

Custodial accounts also count heavily against need-based financial aid. On the FAFSA they’re reported as the student’s asset, assessed at up to 20%, compared with up to 5.64% for parents’ assets, Chase explains. One legal workaround is to sell the investments and move the money into a custodial 529 for the same child, since a 529 accepts only cash under the federal statute. The new account should be titled the same way as the custodial account, and the custodian can’t change its beneficiary, because the duty to use the money for the child doesn’t end when it leaves the original account, FinAid explains. For a dependent student, a custodial 529 counts as a parent asset. How 529s and UTMAs Impact the FAFSA covers the timing.

The handoff

The custodianship ends at an age set by state law, and the custodian must then transfer the property to the young adult. Under the model act, accounts funded by gifts or by transfers a will or trust authorizes end at 21, while accounts that stand in for a guardianship, such as a life insurance payout or a court award to a child, end at the state’s general age of adulthood. States have adjusted the gift age. It’s 21 in most states and 18 in some, and Louisiana’s version defines an adult as someone 22 or older, according to Louisiana’s statute. Several states let the giver choose a later age, usually up to 25, and Wyoming allows up to 30, according to FinAid’s state-by-state table.

Where a later age is allowed, it’s typically written into the account’s title when the gift is made. Pennsylvania’s version, for example, lets the giver add a later age to the custodial designation, and if no age is specified, the handoff happens at 21, under Section 5321 of the state’s act.

Because the money keeps growing in your child’s name, the handoff age decides how much a young adult takes control of. Assuming a hypothetical 7% average annual return, a $10,000 gift made at birth could be worth about $33,799 at 18, $41,406 at 21, $54,274 at 25, and $76,123 at 30.

• The original gift
• Growth

Hypothetical example assuming a 7% average annual return, compounded annually, with no fees, taxes, or withdrawals. Not a prediction or guarantee. The handoff age depends on your state and, in some states, on the age the giver chooses.

See the numbers

A $10,000 gift at birth, by handoff age

Handoff age	Gift	Growth	Value
18	$10,000	$23,799	$33,799
21	$10,000	$31,406	$41,406
25	$10,000	$44,274	$54,274
30	$10,000	$66,123	$76,123

Brokerages are under pressure to make the handoff happen on time. In its 2020 notice, FINRA told firms to verify whether a custodian still has authority once the child reaches the relevant age, and pointed to practices such as building the termination date into account titles and moving the assets into a new account in the young adult’s name. In December 2019, FINRA had sanctioned Citigroup Global Markets, J.P. Morgan Securities, LPL Financial, Morgan Stanley Smith Barney, and Merrill Lynch after custodians kept authorizing transactions months or even years after beneficiaries came of age, ThinkAdvisor reported. Some firms now restrict accounts that miss the deadline. Fidelity, for example, restricts a custodial account unless its assets move to an account in the beneficiary’s name within 60 days of the age of adulthood in their state of residence.

After the handoff, the money is simply your child’s, to use for college, a car, a first apartment, or anything else. The Hand-Off covers the transition, Liquidating Safely covers turning the investments into cash when the time comes, Using Custodial Funds for Life Starts covers big purchases, and What Happens at the Age of Majority? explains your child’s rights at the handoff in detail.

How custodial accounts compare with other accounts

Your child can own several kinds of accounts outright, but ownership and control work differently in each. A custodian manages a custodial Roth IRA until the child reaches a required age, typically 18 or 21 depending on the state, according to Fidelity’s guide to Roth IRAs for kids. A Trump Account is owned by the child, while a parent or guardian acts for them until 18, and withdrawals generally aren’t allowed before then, Fidelity explains. The table sums up the differences.

Federal rules for 2026. Handoff ages vary by state, and providers set their own procedures for the handoff.

Many families use more than one of these, as The Ultimate Guide to Building a Generational Nest Egg for Your Child describes. Comparing Investment Accounts for Kids lines them up on taxes and flexibility, and Custodial Brokerage Accounts vs. Parent-Owned Taxable Accounts, The Custodial Roth IRA, and The 530A Trump Account Explained go deeper on the alternatives.

The 2026 update to the UTMA

In 2026 the Uniform Law Commission approved the act’s first major update since 1983, the ABA reports. The new version will be published at uniformlaws.org this fall and recommended to every state, but it takes effect only where a state enacts it. Its main changes:

• Later handoffs. States could let new accounts created by gifts, or by transfers a will or trust expressly authorizes, run until 25 or a younger age the giver picks. Accounts that substitute for a guardianship would still end at the state’s age of adulthood.
• Portability. Custodians could move money into other accounts for the same child, including 529 plans, ABLE accounts, special needs trusts, and certain other trusts.
• A clear line on support. The act would state outright that a custodian can’t use the account to meet their own legal duty to support the child.
• Still one custodian. Co-custodians remain off the table, but naming a successor would get easier.
• A higher court threshold. The size of a transfer that triggers court oversight would rise from $10,000 to a suggested $50,000.

Until your state adopts the update, the rules in this guide apply. If you want more control than the current law offers, such as payouts in stages, a trust can provide it, and the drafters themselves suggest a trust for anyone who wants a more complex arrangement. Understanding Trust Funds for the Middle Class explains how trusts work.

A legal checklist for custodians

• Open the account with the custodial wording your state’s law requires, and keep the paperwork.
• If your state lets the giver choose a later handoff age, decide when you open the account.
• Use your child’s Social Security number, and keep the account separate from your money and your other children’s.
• Invest for your child’s timeline, and skip speculative bets.
• Pay for extras straight from the account, at the time, and keep a receipt for each.
• Don’t use the account for food, everyday clothing, housing, health care, child care, allowances, or child support.
• Name a successor custodian in a signed, dated, and witnessed document.
• For a large gift, consider a custodian other than the person giving it.
• Keep a record of who gave what each year, for gift tax and thank-you notes.
• Keep the records your child’s tax return needs, and file it when one is required.
• Show your child the records when they ask. Once they’re 14, it’s their legal right.
• Plan the handoff conversation well before the deadline. The “Wealth Transfer” Conversation has a script.

How GoodNest fits

GoodNest is built for the giving side of all this. Loved ones can give toward your child’s future from your child’s GoodNest page, often alongside a small keepsake like a book. GoodNest doesn’t hold or invest the money, and it isn’t a custodian. Gifts go straight to you by Zelle, Venmo, or PayPal, and you decide which account each gift goes into, so the legal choices in this guide stay in your hands:

• Decide before you deposit. Once a gift lands in a custodial account, it’s your child’s for good. Money meant only for school may fit better in a 529 plan you own. Whichever you choose, set it as the destination on your child’s page, and the page tells family where their gifts go.
• Deposit promptly, one child per account. The act expects a giver to put the custodian in control of a gift as soon as practicable, and each account can hold money for only one child.
• Keep a simple record of who gave what and when. Each gift sent from your child’s page is written down with who sent it, how much, and when, and you can add gifts that came another way and record when you move money into the account. It helps generous givers track their $19,000 exclusion and makes thank-you notes easy.

Building Your Village covers how to welcome gifts from family and friends, and Milestone Contributions maps which occasions suit which account.

The bottom line

A custodial account is one of the simplest ways to give a child property, and one of the most permanent. The moment money goes in, it’s your child’s, and the law treats the custodian as a fiduciary with real duties: invest carefully, keep the money separate, keep records, and spend it only on extras that benefit your child. Do that, name a successor, and plan for the handoff, and the account will do exactly what it’s meant to do. For how custodial accounts fit with everything else you’re building, return to The Ultimate Guide to Building a Generational Nest Egg for Your Child.

Frequently asked questions

Can a parent withdraw money from a custodial account?

Yes, but only to spend on the child, for things that benefit them beyond the basic support parents legally owe, such as food, everyday clothing, and housing. A custodian can’t take the money back, move it into their own account, or reimburse themselves years later for expenses they already paid. Courts have ordered parents who did those things to repay the money, sometimes with interest or lost growth.

Is a UTMA account irrevocable?

Yes. Under the Uniform Transfers to Minors Act, a deposit is an irrevocable gift that belongs to the child from that moment, no matter who made it. The giver can’t take it back or move it to another child. The custodian can spend it for the child’s benefit or move it into a custodial 529 for the same child, and must hand it over at the age set by state law.

Can a custodial account be divided in a divorce?

Generally not. Courts in states including Colorado, Ohio, North Carolina, and Indiana have treated a properly created custodial account as the child’s property, not marital property. A court may want proof that the account was set up correctly, so keep the opening paperwork.

What happens to a custodial account if the custodian dies?

The account stays the child’s. A successor the custodian named in a signed, dated, and witnessed document takes over. If none was named, a child who is 14 or older can choose one within 60 days. Otherwise the child’s conservator serves, or a court appoints a successor at the request of a family member or other interested person.

At what age does a child get control of a UTMA account?

It depends on the state. For gifts, the handoff age is 21 in most states and 18 in some, and Louisiana uses 22. Several states let the giver choose a later age, usually up to 25, and Wyoming allows up to 30. Where a later age is allowed, it’s typically written into the account’s title when the gift is made.

Sources

• Superior Court of Pennsylvania, In re Gumpher (December 17, 2003), via FindLaw.
• Benjamin Orzeske, “Uniform Laws Update: The New Uniform Transfers to Minors Act”, Probate & Property, American Bar Association (September/October 2026).
• South Carolina General Assembly, 2021-2022 Bill 3821, South Carolina Uniform Transfers to Minors Act (Act No. 128, signed April 4, 2022), which reprints the Uniform Law Commission’s official comments.
• FINRA, Regulatory Notice 20-07, “FINRA Reminds Member Firms of Their Responsibilities for Supervising UTMA and UGMA Accounts” (February 27, 2020).
• Supreme Court of Iowa, In re Marriage of Rosenfeld (September 4, 2003), via FindLaw.
• Legal Information Institute, Cornell Law School, 26 U.S. Code § 529, Qualified tuition programs (accessed October 2, 2026).
• Fidelity Investments, 529 plan overview and disclosures (accessed October 2, 2026).
• Supreme Court of Virginia, Carlson v. Wells (January 13, 2011), via FindLaw.
• Supreme Court of New York, Westchester County, Wagman v. Wagman, 2007 NY Slip Op 52388(U) (December 5, 2007), New York State Law Reporting Bureau.
• North Carolina Lawyers Weekly, summary of Jimenez v. Brown, North Carolina Court of Appeals (January 4, 1999).
• Wisconsin Law Journal, summary of Boyer v. Belavilas, U.S. Court of Appeals for the Seventh Circuit, No. 05-2764 (accessed October 2, 2026).
• Colorado Court of Appeals, In re Marriage of Nevedrova, 2024 COA 112 (October 10, 2024).
• Internal Revenue Service, Revenue Procedure 2025-32 (October 9, 2025).
• Internal Revenue Service, “IRS releases tax inflation adjustments for tax year 2026, including amendments from the One, Big, Beautiful Bill”, IR-2025-103 (October 9, 2025).
• Chase, “Can a custodial account affect financial aid eligibility?” (accessed October 2, 2026).
• FinAid, “UGMA & UTMA Custodial Accounts” (accessed October 2, 2026).
• Louisiana State Legislature, Revised Statutes 9:751, definitions for the Louisiana Uniform Transfers to Minors Act (accessed October 2, 2026).
• FinAid, “Age of Majority and Trust Termination” (accessed October 2, 2026).
• 20 Pennsylvania Consolidated Statutes § 5321, Delay in transfer of custodial property after minor attains age 21, via Onecle (accessed October 2, 2026).
• ThinkAdvisor, “FINRA Fines 5 Big Firms for ‘Know Your Customer’ Failures” (December 26, 2019).
• Fidelity Investments, “Transfer your UGMA/UTMA to the beneficiary” (accessed October 2, 2026).
• Fidelity Investments, “Turbocharge your child’s retirement with a Roth IRA for Kids” (accessed October 2, 2026).
• Fidelity Investments, Trump Accounts guide, Fidelity Learning Center (accessed October 2, 2026).

This article is for general educational purposes only and is not legal, tax, or investment advice. Custodial account law varies by state, and each court decision described here applied its own state’s law to its own facts, so treat the cases as examples rather than predictions of how a court would rule for your family. The chart is a hypothetical example assuming a 7% average annual return, compounded annually, with no fees, taxes, or withdrawals, and is not a prediction or guarantee. Tax figures are for 2026 and change over time. Organizations and products named are examples, not endorsements. GoodNest does not provide legal, tax, or investment advice and does not hold or invest funds. For decisions about a specific account, talk with an attorney in your state.