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On many "pro/con" lists for UTMA accounts, one of the disadvantages listed is that the beneficiary, after reaching a certain age which varies between states, has full control of the money. Why is this considered a disadvantage?

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    Considered by whom?
    – littleadv
    Apr 1 at 4:50

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As always, the question is "compared to what, for what purpose".

Many folks would prefer a trust that limits how much a young person can get themselves into trouble until they have had more time and experience, rather than turning it all over at once at a specific age. They may also want to designate it for specific purposes.

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  • It's not the age of majority, it's the age of termination of the trust. The age of majority in nearly all states is 18, however in most states, UTMA trusts terminate at 21. A number of states go up to 25, Wyoming allows up to 30.
    – user71659
    Apr 2 at 3:32
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one of the disadvantages listed is that the beneficiary, after reaching a certain age which varies between states, has full control of the money. Why is this considered a disadvantage?

The problem is that once they hit that age, the young adult can take the money on spend it on whatever they want.

The person who sets it up could say for more than a decade this money is for college, or to help buy a house; but the young adult could use it to buy anything they want. They can buy a car. They can go to Vegas. They can purchase extremely shady cryptocurrency. They can invest it wisely and use it to start their retirement fund. None of which match the reason why the other person started the UTMA.

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  • What do you mean "new owner"? They were always the owner.
    – littleadv
    Apr 1 at 15:59

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