If you ever said "we'll open this account for the kids," this episode is for you. Hosts Ablavi Gbenyon-Little and Maurice Wilson explain what a UTMA (Uniform Transfers to Minors Act) account really is: an account where assets legally belong to the child immediately and an adult only serves as custodian until the age of majority.

The episode covers why families use UTMAs—simplicity, no contribution limits, flexibility in spending, and grandparent gifting—and the trade-offs many miss, including permanent loss of parental control once the child reaches 18 or 21 and the inability to reverse or redirect the assets into trusts later.

Key consequences are discussed in plain terms: UTMA assets count as the student's assets for financial aid calculations, investment income can trigger the "kiddie tax" (taxed at the parent’s rate above thresholds), and assets held in the child’s name may be exposed to creditors, lawsuits, or divorce. The show also highlights behavioral risks of giving large sums to young adults who may not be prepared to manage them.

The hosts recommend matching the account choice to your intent: UTMAs can make sense for modest gifts and when flexibility is prioritized, but are often a poor fit for long-term legacy, asset protection, financial-aid-sensitive planning, or when parents want control past the age of majority. The episode closes with the core takeaway: use UTMAs with your eyes wide open and choose the right tool for your long-term goals.