As custodian, you are in control of your child’s custodial account until he or she reaches your state’s age of majority. Depending on your state of residence, this is normally 18 or 21, though certain states may allow you to select an even later age for your child to take control of the custodial account.

What happens to a custodial account?

When funds are transferred into a minor child’s custodial account at a financial institution or brokerage firm, the funds now irrevocably belong to that child. In other words, parents are legally forbidden from using custodial account money for expenditures that benefit themselves (like a new car).

Can a child own an Etrade custodial account?

You maintain control over managing and investing the assets in the account until the child becomes a legal adult, at which point they become the legal owner of the account and all of its assets. Most brokers, including Etrade, offer custodial accounts as they are relatively easy to setup.

When do you open a custodial account for a child?

When you open up a custodial account for your child using guidelines set up by your state’s Uniform Gifts to Minors Act (UGMA), your child will get the entire account when they turn 18 in some states and 21 in others. You will cease any control you have on the account and your child can do whatever they want to with the money.

Can a parent withdraw money from a custodial account?

While you can technically withdraw money from a custodial account before your child reaches the age of majority, you can only do so for the direct benefit of the child. That means any purchases must be to help your child, like buying new school clothes or braces.

Who is the creator of the custodial account?

As the account creator, you manage the funds for the benefit of the child until adulthood, but the assets are no longer yours.