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Account Mixup Brings Up Questions
I opened what I thought was a savings account for my grandson, with me as the only signer. I now find out it was a CD account, opened as a TXUTMA account, with me as the custodian. When the CD matures, can I get the money in my name and close the account or will it be made out to my grandson, who is only seven?
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 You will have the ability to cash the CD and handle the funds. Under an UTMA account, your grandson is actually the owner of the funds. He has the tax liability on the interest income, and technically, when you cash the CD, then you are responsible to ensure that the funds are used for his benefit. These accounts are often CDs or just savings accounts where the funds are more accessible. As your CD matures, you should consider the account type you want. The UTMA is a sound account for money given to a child for several reasons. The tax liability is one, actual ownership is another and the child won't have access until he is an adult.
Published on BankingQuestions.com 9/08/10
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