You’ll be able to transfer existing shares of stock, mutual funds or other securities from your account to the custodial account, or buy specific securities directly within the custodial account. The child will take control of the account when they hit a certain age — typically 18 or 21, depending on the state.

How do I gift a custodial account?

A good vehicle for such a gift to a child is a custodial account opened under the Uniform Transfer to Minors Act (UTMA) or the Uniform Gifts to Minors Act (UGMA). To open one of these accounts, simply tell a bank, brokerage or mutual fund company that you want to do it. You’ll get a standard form to fill out.

How do you transfer a custodial stock account?

A stock power form formally instructs your broker to transfer ownership from the custodian to you. This form requires information, such as your full name, address and Social Security number; the description of the shares and how they are to be reissued; and your signature or that of the former custodian.

Is there a way to gift stock to a minor?

You can also gift stocks to minors using custodial accountseven if you don’t have a brokerage account yourself. Companies like Stockpile, for example, allow you to gift full and fractional shares to custodial accounts you open online for your kids.

When do you transfer stock to a custodial account?

You’ll be able to transfer existing shares of stock, mutual funds or other securities from your account to the custodial account, or buy specific securities directly within the custodial account. The child will take control of the account when they hit a certain age — typically 18 or 21, depending on the state.

Can a custodial account be set up for a child?

A custodial account can be an excellent way to make a financial gift to a child—whether your own, a relative’s, or a friend’s. This type of account, established under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA), is set up by an adult for the benefit of a minor.

How much can you invest in a custodial account?

That means free investment trades for your long-term fund investments. In a custodial account, the first $1,050 of annual earnings are tax-free and up to $15,000 in annual gifts can be invested under the gift tax exclusion. That is the case at Etrade and other custodial accounts that fall under the UTMA/GTMA regulations.