Can I keep control over large cash gifts to a child?


I want to start giving my child (who is three months old) $13,000 a year, but I don't want her to blow the money on music and clothes when she's 16. Where do I put the funds so they'll still be there to pay for college?


You can maintain control of the money via your state's Uniform Transfers to Minors Act (UTMA), a trust, or a 529 college savings account.

Using the UTMA option, you name an adult custodian to manage the gift until the child reaches the age at which the Act says that the gift property must be turned over to her. In most states, this age is 21, although but in a few states it's 18, and in another handful of states you can extend the age to 25. You can easily set up a UTMA account at a bank or with a broker. The UTMA is available in all states except South Carolina.

If you want to control the money past the age that custodianships end in your state, set up a trust and name yourself as trustee.

Finally, you can open a 529 college savings account for your lucky infant. The money you deposit will add up to a tidy sum by college age -- and you'll get tax benefits, as well.

Learn more about Leaving An Inheritance for Children.

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