What is a custodial investment account?

A Custodial Investment Account is an investment account that is in a child's name but managed by an adult. Contributions to this account can come from anyone and funds may be withdrawn while the child is a minor as long as it is for their direct benefit. Custodial accounts are easy to open, and doesn't require an attorney like a trust does.

While it offers a lot of flexibility, it's important to note that there are significant things to consider before you dive in. First, there ARE tax implications at certain thresholds. Be sure to look into the specifics for the parents income bracket and residency. Also, since the account is in the child's name, the asset may effect their ability to get financial aid in the future.

Do you have a custodial investment account for your child? Did you chose another type of savings for your kids? Are you apprehensive to jump in because of your financial situation or maybe just don't know where to start? Let us know in the comments!