Converting Utma into 529 Plan

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
Topic Author
rerrabolu
Posts: 11
Joined: Sat Apr 20, 2013 2:06 pm

Converting Utma into 529 Plan

Post by rerrabolu »

My son will begin his college next year. I had setup a Utma account for him. I just found out that funds in Utma hurt more than 529. Anyone knowledgeable could advise me regarding the following:

Liquidate Utma and move funds to 529 plan (student owned). When 2017 tax returns are filed, Utma assets would be non-existent. Does this help. I am aware of capital gains tax that will be due when Utma assets are liquidated prior to transfer to 529 plan.

Per my understanding the student owned 529 plan will weigh only ~5.5% while Utma will weigh 20%

He will be going to a state school and I was told he will not get any subsidized loans - so does it even matter if I move it out of Utma into a 529 plan ?

Any other way to think about it will be helpful.
Post Reply