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I have read quite a bit about how the UGMA/UTMA custodial accounts are not that great after all. So, I'm thinking about closing the custodial account (about 3K)and using the money for qualified expenses. My child is still 4 years away from college, and attends a private school with fin. aid., so I thought I could use the UGMA/UTMA money for tuition, a computer, camp, etc. Later, I might open up a 529.
Since the UGMA/UTMA account is not a checking account, I can't use it to make payments directly. The bank guy that handles the custodial account says he can close it and send me a check and I can deposit it in my own account and use it as planned and keep the receipts in an envelope. Does this work? And if it does work, can I justify the expenses with receipts of expenses made for the child before the check arrived ( previous tuition, previous qualified expenses)?