Beginner's Guide to UGMA and UTMA Custodial Accounts

Eligible Expenses:

Any expense that is for the benefit of the child may be paid from the custodial account, at the custodian’s (usually the parent) discretion.

Effect on Federal Financial Aid Eligibility:

Custodial accounts are considered an asset of the child they are set up for, and therefore are counted heavily against financial aid. Approximately 20% of these assets will be expected to be used towards funding a student’s education in any given year.