<p>As a way to get my son’s UTMA account reduced, I would like to use this money to pay for his private school education. He is currently a junior in high school. Is this legitimate? Can someone point to any IRS site so I can see “chapter and verse” and make a decision and/or talk to a tax advisor?</p>
<p>yes you can use it to pay for private school- because that isn’t a normal parental expense but benefits the childhttp://finaid.org/savings/ugma.phtml[/url] ”>http://finaid.org/savings/ugma.phtml</a> ;
However, nothing prevents the custodian from spending the money for the benefit of the child, so long as the expenses aren’t “parental obligations” or otherwise benefit the custodian. Parental obgligations are expenses a parent is normally expected to provide for his or her child, such as food, clothing, medical care and shelter. But if your child wants a computer or to go to summer camp, it is usually acceptable to spend the child’s money on those expenses. Likewise, you can spend the child’s money for the child’s college education. The parent can then set aside some of his or her own money in a college savings account owned by the parent. Obviously, this only works if there are non-parental obligation expenses that the parent would otherwise have provided for his or her children. Attempts to undo an UGMA transfer in this fashion should only be done in consultation with a qualified accountant.
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<p>Thanks. The information was very useful in our decision making process.</p>