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Can I transfer UGMA (Uniform Gifts to Minors Act)/UTMA (Uniform Transfers to Minors Act) accounts into a College Savings Program?

April 26, 2017accounts ACT College Savings gifts minors transfer transfers UGMA Uniform UTMA

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Can I transfer UGMA (Uniform Gifts to Minors Act)/UTMA (Uniform Transfers to Minors Act) accounts into a College Savings Program?

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Yes, the custodian on a UGMA/UTMA account must use the assets for the benefit of the child. An UGMA/UTMA account can be liquidated, which would be a taxable event, and the money placed into a 529 plan. The UGMA/UTMA custodial responsibilities for those assets would still apply. This means that the assets used to purchase the 529 plan would need to be for the benefit of the child.