Want to teach your kid about stocks? These 3 apps can help

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A custodial account is a stock trading accounts for minors account such as a bank account stock trading accounts for minors, a trust fund or a brokerage account set up for the benefit of a beneficiaryand administered by a responsible person, known as a custodianwho has a fiduciary obligation to the stock trading accounts for minors. In one form, a custodial account is an account set up for a minorbecause the minor is under the legal age of majority.

The custodian is often the minor's parent. In another form, a custodial account is a trust account owned by an individual or institution, managed by a named party for purposes of rapid distribution of funds in that account. This is commonly used for petty cash, or for stock trading accounts for minors that have very limited and clearly defined payees and transaction types. For example, law firm accounting includes trust accounts for disbursing funds entrusted to the law firm by each client for the client's benefit.

In the United States, the Uniform Transfers to Minors Act provides for the possibility of bank accounts, brokerage accounts, and other property to be held in a custodial capacity under the Stock trading accounts for minors so that the custodian has the right to control the property but that legal title is deemed to be in the minor for many purposes. Brokerage account agreements under Article 8 of the Uniform Commercial Code create a legal relation known as "custodianship", which is distinguished from the traditional concept of a trust.

The treatment of a brokerage account based IRA as a trust for tax purposes is largely a legal fiction. If Article 8 is set aside and the brokerage account is considered purely under principles of common lawthere is a possibility of construing the collection of brokerage accounts in the intermediated custodial holding chain as a collection of directed agency nominee trusts.

According to this legal theory, each securities position with respect to a particular class of securities which appears in the brokerage firm's omnibus securities account is a trust fund for the benefit of customers sharing participation in that position. To exactly what stock trading accounts for minors the operation of such a theory would be restricted by Article 8 and the Securities Investor Protection Act in future litigation is not obvious, and is perhaps irrelevant as a practical matter because of the level of detail in the legislation mentioned.

The trustee of a nominee trustbeing a directed agent of the beneficiaries, cannot even bind the trust estate to a debt in a capacity that is sufficiently separate from the capacity of the beneficiaries to contract the same debt themselves. For this reason, the nominee trust is not a debtor-person for bankruptcy purposes and therefore cannot obtain bankruptcy protection like it were a corporation.

This is one reason why nominee trusts are not considered to stock trading accounts for minors actual trusts by some lawyers. In England, there is no Article 8 and therefore principles of common law may operate with greater freedom. A securities intermediary is naturally characterized as a trustee [3] for best direct trading brokers online day benefit of clients holding interests in those securities.

From Wikipedia, the free encyclopedia. Retrieved from " https: Views Read Edit View history. This page was last edited on 31 Marchat By using this site, you kostenlose binare optionen strategien to the Terms of Use and Privacy Policy.

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Here are some of the concerns:. Those assets belong to the child. Never transfer assets to a custodial account if you have any concern whatever that you may need to recover those assets later. When your child turns 21 or an earlier age, in some states , the custodian must turn the assets over to the child. Some people are mature and thoughtful at age 21 or earlier; many are not. Some people think of a custodial account as a good way to save for college, and learn only later that the account causes a reduction in financial aid.

Under current law, assets owned by the child including any assets in a custodial account for the benefit of that child count much more heavily than parental assets in determining financial aid awards.

For children who are college-bound, the availability of financial aid is a relevant concern in setting up a custodial account.

A custodial account belongs to only one child. That can be a real dilemma for parents who are intent on treating their children equally. A trust can be set up for the benefit of all your children, but a custodial account is owned directly by the child named at the time it was established. The reason is that if you die before the account terminates, the account will be included in your estate.

This is true even though the transfers to the account are completed gifts. The account is included in your estate because you retained the power to determine how your gift will be applied for the benefit of your child. You can avoid the problem by naming as custodian someone who will not make any gifts to the account. For example, a grandparent might name the parent as the custodian. You have a legal obligation to support your child.

If you use income of the custodial account to satisfy that obligation, the IRS may contend that the income will be taxed to you in that case, not to your child. If you are concerned about this issue, you should use the account only for items that supplement your legal obligation to support the child.

Exactly where to draw the line is the subject of much debate, and may vary depending on your economic status and the particular state law that applies. If your child dies before receiving the account, the assets will pass according to the law of your state. Often the result is not what you would have wished, especially if the child has siblings. When you establish a trust for your child, you can plan for this possibility. Before establishing a custodial account, you should carefully consider your objectives and other ways you may achieve them.

Another possibility is to set up a trust. When Custodial Accounts Go Sour. What Expenditures Are Proper? Compensation in Stock and Options. Thomas Current as of July 8, Consider Your Options A plain-language guide for people who receive stock options or other forms of equity compensation.

Equity Compensation Strategies A text for financial advisors and other professionals who offer advice on how to handle equity compensation including stock options.

Capital Gains, Minimal Taxes Tax rules and strategies for people who buy, own and sell stocks, mutual funds and stock options. A publication of Fairmark Press Inc. Thomas - That Thing Rich People Do. A plain-language guide for people who receive stock options or other forms of equity compensation. A text for financial advisors and other professionals who offer advice on how to handle equity compensation including stock options. Capital Gains, Minimal Taxes.

Tax rules and strategies for people who buy, own and sell stocks, mutual funds and stock options.