Invested money in student's name, big mistake

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Q: Are UGMA and UTMA accounts still good choices?
A: For many years, UGMAs/UTMAs were the only substantial education savings vehicles available, so many investors have built up sizable amounts in these accounts.</p>

<p>UGMA/UTMA accounts do not have income or contribution limits. And, at least part of your earnings may be exempt from federal income tax. Some or all will be taxed at the child’s lower rate if the child is under age 18.</p>

<p>Contributions to UGMA/UTMA accounts are irrevocable, meaning that once the money or other property has been given, you cannot change your mind and withdraw the gift.</p>

<p>You can withdraw money anytime for the benefit of the child — not just for education. The child assumes control of the account upon reaching the age of majority (18 or 21 in most states).

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<p>[American</a> Funds - Nine questions people ask about saving for college](<a href=“http://www.americanfunds.com/college/importance/faq.htm]American”>FAQ | Capital Group)</p>