Custodial Account


  • Account established at a financial institution.
  • Managed by parent or another designated guardian.
  • Assets must be used for the benefit of the child.


  • Assets are controlled by the custodian.
  • Income earned is taxed to the child. (Kiddie tax rules apply if the child is under 19 or, if a full-time student, under 24.)
  • Account costs are generally low; no trustee costs.


  • Child gains complete access to the account at age of trust termination (generally 18 to 21, depending on the state).
  • Transfers are irrevocable.

Financial Aid Impact

  • High impact.
  • Treated as an asset of the child.