UTMA (Uniform Transfers to Minors Act) and UGMA (Uniform Gifts to Minors Act) accounts are investment accounts that allow high-income professionals to transfer assets to children while maintaining simplified management and tax benefits. Doctors, dentists, and other high earners often overlook these accounts or confuse them with 529 plans, missing opportunities to teach kids about investing and transfer wealth efficiently.
This video explains how UTMA and UGMA accounts work, including ownership rules, tax treatment, and transfer of control. Unlike 529 plans, the child gains control of the account at the age of majority, making them flexible for purposes beyond education. These accounts can hold cash, stocks, bonds, and other investments, giving families a versatile tool for wealth transfer, education, or early financial empowerment.
The discussion also highlights considerations for high-income earners, including gift tax rules, coordination with other accounts like 529s, and potential impact on financial aid eligibility. Understanding the nuances of UTMA and UGMA accounts helps physicians plan for intergenerational wealth transfer while teaching children responsible investing habits.
This content equips medical professionals with the knowledge to use UTMA and UGMA accounts strategically, ensuring their family's financial future is supported while maximizing tax efficiency.
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