Suze Orman Answers Our Questions About Money: College Savings Edition – Kveller
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Suze Orman Answers Our Questions About Money: College Savings Edition

As part of our month-long series about Women, Work & Money, we’ve brought on internationally acclaimed personal finance expert Suze Orman to answer some of our questions about money. This question comes from Kveller writer Carla Naumburg in Boston, MA.

Carla Asks:

My grandparents give a small amount of money to the girls each year. We have been putting it in a UGTM (uniform gift to minors) account, which, if I am not mistaken, the girls automatically get when they are 18. What do you recommend in terms of this sort of thing? Do you like these accounts? Or do you prefer some sort of trust?

Suze Orman Responds:

In regards to uniform gift to minor act accounts, I have to tell you the truth–I don’t like these accounts. That is because, first of all, they count as a child’s asset when it comes to financial aid for a college education. Also, you never know when Little Johnny Angel is going to grow up to be Johnny Devil at the age of 18 (I’ve seen it too many times).  These kids get X amount of money at 18 and rather than using it to pay for college or something like that, they take the money and buy a BMW, or use it to travel, or do other things that you really might not want your kids to do.

So, if you’re going to be putting money into a child’s name for future expenses, such as a college education, you are far better off to do it in a 529 college savings plan than a uniform gift to minors act account. If you have money in a UGMA account you can always transfer it into a 529 plan or you can use it at any time for any of the needs of the child when they are young. Remember when you give money to a child in a UGMA account it is an irrevocable gift, therefore it is that child’s money once they’ve reached the age of 18 and there is nothing you can do about it. If they want to use that money for something that you do not approve of, it is too late.

The best place to find information on 529 plans is

Check out Suze Orman’s Approved Card, which was named “Best Card for Teenagers” by Card Hub.

This series was brought to you by a generous grant from the Jewish Women’s Foundation of New York. JWFNY encourages women to make change. Learn more at

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