Opening separate accounts

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epilnk
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Opening separate accounts

Post by epilnk » Tue May 05, 2020 12:23 am

I would like to open two new Vanguard accounts to gift to my sons for the purposes of teaching them how to invest. I do not want either my bank account or my vanguard account information to remain linked to theirs, but the younger one does not yet have a bank account of his own (we will rectify this after covid restrictions are relaxed) so I need to transfer assets directly from mine.

Will I be able to completely unlink my accounts after doing so? Is there a better way to do this that I am missing?

mega317
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Joined: Tue Apr 19, 2016 10:55 am

Re: Opening separate accounts

Post by mega317 » Tue May 05, 2020 1:11 am

Open a bank account for him and write him a check. You can open a bank account online in minutes, covid be damned. Or I guess he could deposit a check directly to Vanguard.

I'm interested how are you going to teach once the accounts are open? The way I learned was listening to my dad who spent hours researching companies and money on newletters, and buying JDSU about here:
Image

And AOL here:
Image
https://www.bogleheads.org/forum/viewtopic.php?t=6212

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celia
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Re: Opening separate accounts

Post by celia » Tue May 05, 2020 1:55 am

Is either son a minor? (minors can't own accounts directly) If not a minor, they need to open the accounts for themselves.
Do they both prepare their own taxes? Can they afford to pay tax on dividends and capital gains? Are they agreeable to this?
Will they select the funds and enter the orders or do you need to have agent authorization for this?
Do they have jobs and know the importance of opening Roth IRAs early?

When you are ready to fund them, just give each of them a check made out to Vanguard.

HomeStretch
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Re: Opening separate accounts

Post by HomeStretch » Tue May 05, 2020 6:20 am

The Vanguard app offers mobile deposit of checks.

Topic Author
epilnk
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Re: Opening separate accounts

Post by epilnk » Tue May 05, 2020 10:59 am

celia wrote:
Tue May 05, 2020 1:55 am
Is either son a minor? (minors can't own accounts directly) If not a minor, they need to open the accounts for themselves.
Do they both prepare their own taxes? Can they afford to pay tax on dividends and capital gains? Are they agreeable to this?
Will they select the funds and enter the orders or do you need to have agent authorization for this?
Do they have jobs and know the importance of opening Roth IRAs early?

When you are ready to fund them, just give each of them a check made out to Vanguard.
One is a minor (17). I am happy to open an account under my own name, give him the password, and transfer ownership later, but it MUST remain unlinked to my primary account.

Both will be dependents through college, and they will not be given accounts large enough to cause tax headaches. They will be responsible for the taxes incurred.

They will select the funds and enter orders.

Neither currently has a job, one due to corona. His prior job was under the table so he was not eligible for a Roth.

I did not see an option for opening an unfunded account - did I miss that? Vanguard’s help page is spectacularly opaque.

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rob
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Re: Opening separate accounts

Post by rob » Tue May 05, 2020 11:09 am

epilnk wrote:
Tue May 05, 2020 10:59 am
One is a minor (17). I am happy to open an account under my own name, give him the password, and transfer ownership later, but it MUST remain unlinked to my primary account.
Depends what you mean by "unlinked".

The minor can have their own vanguard.com login and they will only see their accounts (not yours). I have my kids setup this way.

For the minor you will have to make it a UTMA/UGMA acct... so your name is also listed on the account. You will find lots of issues on the website when moving money to their acct but it can be done over the phone.

I might be reading too much into the question.... The minor inherits some status if you have flagship or whatever... I think I saw somewhere that the minor sees that... not sure if on website with the personal rep name or on statement but 99% sure I saw it somewhere. Minor may not have a clue what it means... but check it out if this is a concern. Otherwise... Fido has a great web interface and service.
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien

Topic Author
epilnk
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Joined: Wed Apr 18, 2007 7:05 pm

Re: Opening separate accounts

Post by epilnk » Tue May 05, 2020 11:13 am

mega317 wrote:
Tue May 05, 2020 1:11 am
I'm interested how are you going to teach once the accounts are open? The way I learned was listening to my dad who spent hours researching companies and money on newletters, and buying JDSU about here:
Image

And AOL here:
Image
I too learned to invest by losing money in the dot com bubble. We had the assistance of a financial advisor, but fortunately managed to escape his clutches before too much damage was done. It was an expensive lesson, and one I am looking to head off for my kids.

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celia
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Re: Opening separate accounts

Post by celia » Tue May 05, 2020 1:00 pm

epilnk wrote:
Tue May 05, 2020 10:59 am
One is a minor (17). I am happy to open an account under my own name, give him the password, and transfer ownership later, but it MUST remain unlinked to my primary account.
I would set up the accounts properly using their names and SSNs with the younger one being a guardian account. When the 17yo turns âge of majority for your state, turn the account over to him. If you think you should monitor their accounts for a few years, ask them to sign Agent Authorization forms.

Since I would be mailing in checks, I would start by calling Vanguard and asking about the linking issues. I would ask them to send me links to paper forms we print out so ‘we’ could:
Open a taxable brokerage account (son#1)
Open a guardian account -(son#2)
Form to release guardianship status when #2 is an adult (hold onto this until he is old enough)
Agent authorization form


Then send in everything with the checks.

After they get their account numbers in the mail, they should each get their own logins. The minor should have view only access and, as guardian, you will have to enter his orders.

You should be able to see everything but they will only see their own account. Confirm this with Vanguard and ask if this is the recommended way to do this.

Broken Man 1999
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Re: Opening separate accounts

Post by Broken Man 1999 » Wed May 06, 2020 9:36 am

epilnk wrote:
Tue May 05, 2020 10:59 am
celia wrote:
Tue May 05, 2020 1:55 am
Is either son a minor? (minors can't own accounts directly) If not a minor, they need to open the accounts for themselves.
Do they both prepare their own taxes? Can they afford to pay tax on dividends and capital gains? Are they agreeable to this?
Will they select the funds and enter the orders or do you need to have agent authorization for this?
Do they have jobs and know the importance of opening Roth IRAs early?

When you are ready to fund them, just give each of them a check made out to Vanguard.
One is a minor (17). I am happy to open an account under my own name, give him the password, and transfer ownership later, but it MUST remain unlinked to my primary account.

Both will be dependents through college, and they will not be given accounts large enough to cause tax headaches. They will be responsible for the taxes incurred.

They will select the funds and enter orders.

Neither currently has a job, one due to corona. His prior job was under the table so he was not eligible for a Roth.

I did not see an option for opening an unfunded account - did I miss that? Vanguard’s help page is spectacularly opaque.
Yes!

Listed below are your funding options:

Select your funding method
Questions?
-Electronic bank transfer (most common)
-Check
-Add money later
-Exchange


I open shell accounts when I help family members sign-up with Vanguard. Sometimes actual funding of the account is weeks later.

To set the account up, I almost always select "Add money later." Then later on when account is funded, I use the option best suited for the owner.

For actual funding I have used every option at one time or another.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go. " -Mark Twain

Robert20
Posts: 139
Joined: Fri Apr 10, 2020 10:51 pm

Re: Opening separate accounts

Post by Robert20 » Wed May 06, 2020 10:49 am

epilnk wrote:
Tue May 05, 2020 12:23 am
I would like to open two new Vanguard accounts to gift to my sons for the purposes of teaching them how to invest. I do not want either my bank account or my vanguard account information to remain linked to theirs, but the younger one does not yet have a bank account of his own (we will rectify this after covid restrictions are relaxed) so I need to transfer assets directly from mine.

Will I be able to completely unlink my accounts after doing so? Is there a better way to do this that I am missing?
Why dont u open a separate bank account for yourself and link?. You dont need to fund that bank account by a large amount. Whatever u want to transfer from your existing bank, you can transfer (if your worry is NOT to expose your primary account to kids)..

Topic Author
epilnk
Posts: 2677
Joined: Wed Apr 18, 2007 7:05 pm

Re: Opening separate accounts

Post by epilnk » Wed May 06, 2020 3:12 pm

celia wrote:
Tue May 05, 2020 1:00 pm


Since I would be mailing in checks, I would start by calling Vanguard and asking about the linking issues. I would ask them to send me links to paper forms we print out so ‘we’ could:
Open a taxable brokerage account (son#1)
Open a guardian account -(son#2)
Form to release guardianship status when #2 is an adult (hold onto this until he is old enough)
Agent authorization form

Then send in everything with the checks.

After they get their account numbers in the mail, they should each get their own logins. The minor should have view only access and, as guardian, you will have to enter his orders.

You should be able to see everything but they will only see their own account. Confirm this with Vanguard and ask if this is the recommended way to do this.
This is perfect - thank you.

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