a child trust fund?

Question

can anyone give me more information on it

main goal is not 2 worry bout paying for education.
how does it work with the child trust fund i havent really looked into it properly just been told s2 see bout it before my baby boy is born(5weeks time~)

Answer 1

What is your goal? Do you want your child's education paid for, do you want you child to never have to worry about retirement? What is you financial goal behind wanting to have a child trust fund?

The good thing about trusts is that you get to be very specific on how the child has to behave inorder to receive any funds from it. How fund the trust is also up to you, you can do it with assets you pass on after your death, you can build the trust with assets while you're living, or you can fund the trust with life insurance. It all really depends on what your goals are.

Answer 2

You can open a UTMA/UGMA account at your bank. It is essentially an account for your child. The account would be opened in their name with you as custodian over the account. The account would earn interest and since it's in your child's name the interest earned through the year would not be reported to the IRS by the bank since the child is a minor. Best of all the money is untouchable by the child until they are 18 or 21 (i think age depends on the state). Even though it is the childs account only the custodian has transaction authority on the account. You could open this as a checking/savings account or a CD, whatever would earn the highest interest.