How Do You Manage Those Investment Accounts?
By Jeff Yost
One minute, they’re newborns. The next minute, they’re in grade school. And the minute after that, they’re lobbying for a car – either yours, or one to call their own. The fact is, kids grow up fast and, while you likely have received plenty of well-meaning parenting advice over the years, you probably have received less advice on how to manage those investment accounts you or a loved one set up soon after your bundles of joy entered the world, or at some point during their childhoods.
With so many other things to think about like grades, colleges, activities, and – let’s face it – the 24/7 job of raising good kids, it’s no wonder that few parents think about what to do with their minor accounts, also known as custodial accounts, once their babies grow up.
Many people are unaware that the age at which a custodial account may terminate and convert to an individual account varies across states. In most states, termination occurs at either age 18 or 21. For example, in the state of Ohio, if your child is age 18, you have a choice. You can maintain investments in a custodial account until your child reaches age 21, or you can convert the investments to a new individual account in your child’s name. When your child reaches age 21, a custodial account must be converted to an individual account in your child’s name.
Do you have concerns that your child is not yet ready to shoulder this responsibility on his or her own? There is an option to add one or both parents as joint owners on the account, whether the account is converted at age 18 or 21.
No matter which option you choose, the process is simple. Just contact us or stop in and we’ll get the paperwork going. We’ll send you everything you need, including new account documents and an SJS investment management agreement for your adult child to sign. That’s it.
As long as you are working with us, you have a team who has managed the transitions and the accounts of countless SJS babies, many of whom are now second-generation clients. We believe no one is too young for good investment discipline.