Set Up a Kid's Account

One other caveat: The decision to set up these accounts could significantly affect your child's consideration for collegiate financial aid. Universities use a formula to determine how much of a family's household income can go toward the cost of college: a maximum of 5.65 percent of parents' assets, but a much higher 35 percent of your child's money. So your child will carry a higher burden.

Once you have decided to establish an account, seek professional services to handle trusts, which can be quite complex. Banks and full-service or discount brokers can help with applications for UGMAs/UTMAs.

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