The Custodial Account You Opened for Your Grandson Becomes Legally His the Day He Turns 21, and He Can Spend It on a Car. A 529 Never Does.
When your grandson turns 21, the custodial account you opened for him through the Uniform Transfers to Minors Act (UTMA) becomes legally his. At that moment, he holds full control to spend the funds as he sees fit. A 529 college savings plan functions quite differently, keeping you in control of the assets indefinitely and even allowing you to reassign the account to another grandchild if needed.
This key distinction between UTMA accounts and 529 plans is crucial for grandparents considering how to structure gifts for their grandchildren.
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