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Custodial Accounts (UGMA/UTMA)
The Janus Advantage
 

Custodial accounts are established as either a Uniform Gift to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA), depending on your state of residence.

In a custodial account, the child owns the money, but the adult (custodian) manages it until the child takes control of the assets when the child reaches the legal termination age.

Is a Custodial Account right for you?

  • Are you comfortable making an irrevocable gift to a minor?
  • Do you want to transfer assets to a minor in a way that may avoid a gift tax and doesn't require establishing a trust?
  • Will the child and/or his/her family be able to pay for any taxes on earnings within this account?
  • Are you aware that a custodial account can reduce a child's chance to receive financial aid?

Eligibility

  • An account can be established by a parent, relative or friend on behalf of any child under the age of legal termination (usually 18 or 21, but it varies by state) with a Social Security Number. The donor may also act as the custodian on the account.

Tax features

  • Custodial accounts are not tax-deferred, and taxation of earnings from the account will depend on the minor's tax status, income and age. See the Tax Rate chart for details.

Investment minimums

  • Minimum initial investment for a custodial account at Janus is $500 with subsequent investments of $50 or more per month through an Automatic Investment Program (AIP). The minimum investment is $1,000 without an AIP.

Making withdrawals

  • While the custodian manages the account, redemptions can be made at any time for the benefit of the child beyond the normal cost of providing for the child.
  • The child can spend the money any way he or she chooses after taking control of the account at legal termination age, depending on the age of termination of the UGMA or UTMA under the enacting state.

Useful Information

  • Because important tax and legal issues may be involved, we suggest consulting a tax or legal adviser before opening this type of account to determine what would be best for your individual situation.

Look inside. The Janus Way

Tomoko Kotaka

Research Associate

 

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Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus , or if available, a summary prospectus containing this and other information. Read it carefully before you invest or send money.

An UGMA/UTMA Account should be considered a long-term investment. UGMA/UTMA Accounts generally have expenses and account fees, which may impact the value of the account. Withdrawals may be subject to taxes and penalties. For more detailed information about taxes, consult your tax attorney or accountant for advice.

Janus funds are offered only to US Citizens (or US Resident Aliens) residing in the United States or a US Territory, and the information on this Web site is intended only for such persons. Nothing on this Web site should be considered a solicitation to buy or an offer to sell shares of any Janus fund in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction.

If you're a non-US citizen or resident, please see the non-U.S. funds section of our site.

Janus Distributors LLC