The simplest way to do it that satisfies all your requirements would be to put the money into a brokerage account that YOU own, and then gift the account to them after age 25.
A UTMA custodial account would transfer to them automatically at age of majority in your state, which would be younger than 25 most likely. Also, an account in your child's name could have some negative impact on college financial aid, if this is a consideration.
A 529 account would need to be used specifically for educational expenses in order to avoid an additional tax penalty on earnings. It sounds like you want to gift money above and beyond paying for education so that penalty would likely apply.
A trust seems overly complex and costly. Plus any income retained in the trust would be subject to the very compressed trust tax rates.
A UTMA custodial account would transfer to them automatically at age of majority in your state, which would be younger than 25 most likely. Also, an account in your child's name could have some negative impact on college financial aid, if this is a consideration.
A 529 account would need to be used specifically for educational expenses in order to avoid an additional tax penalty on earnings. It sounds like you want to gift money above and beyond paying for education so that penalty would likely apply.
A trust seems overly complex and costly. Plus any income retained in the trust would be subject to the very compressed trust tax rates.
Statistics: Posted by humblecoder — Thu Sep 11, 2025 11:55 am — Replies 5 — Views 462