Junior’s Investment Income May Be Taxable

April 09, 2014

I have four children, two of which have custodial accounts. By definition, those custodial accounts belong to my children, and when they reach the age of majority—18 in most states—they technically can take that money and use it for whatever their hearts desire. Until then, I’m the custodian of the account, and as the custodian, it is my responsibility to make sure the money is managed properly. Not only does that mean making sure the assets are invested wisely, but also making sure that any taxes associated with the account are reported accurately. Continue reading “Junior’s Investment Income May Be Taxable”

How to Invest for Your Child

March 06, 2014

While we usually discuss investing in the context of retirement planning in 401(k)s and IRAs, I was recently asked by a young mother about investing $50k in her 1 year old child’s name. (Since it’s in the child’s name, the money has to be used for his benefit but since he’s a minor, the mother has control over how the money will be invested and spent on his behalf.) Here are some things to consider. Continue reading