529 plan
Education-focused saving
Who controls it
Adult account owner generally keeps control
Tax angle
Potential tax-free qualified education withdrawals; state rules vary
Main trade-off
Education-centered, with expanded qualified uses
Family Money
I have a kid. Where should the money go?
Start with the goal. Education, long-term investing, flexible gifting and inheritance planning can call for different accounts.
Kids money account map
A plain-English starting point. Compare the purpose, control, tax angle and biggest trade-off before opening the relevant tool.
Open
Trump Account
Long-term investing for a child
Who controls it
Special minor-account rules during the growth period
Tax angle
Tax-favored IRA structure; distribution rules matter
Main trade-off
Contribution/investment/distribution restrictions apply
UTMA / UGMA
Flexible custodial gifting
Who controls it
Custodian controls until the statutory transfer age
Tax angle
Child-owned taxable assets; kiddie-tax rules can matter
Main trade-off
Assets become the child's property
Roth IRA for a child
Child has legitimate earned income
Who controls it
Retirement account for the child
Tax angle
Potential tax-free qualified Roth growth/withdrawals
Main trade-off
Contribution requires eligible compensation and annual limits
Trust
Custom control, inheritance or advanced planning
Who controls it
Depends on trust terms and trustee powers
Tax angle
Highly structure-specific
Main trade-off
Legal complexity, cost and tax rules
| Account / structure | Often used for | Control | Tax angle | Main trade-off | |
|---|---|---|---|---|---|
529 plan | Education-focused saving | Adult account owner generally keeps control | Potential tax-free qualified education withdrawals; state rules vary | Education-centered, with expanded qualified uses | Open |
Trump Account | Long-term investing for a child | Special minor-account rules during the growth period | Tax-favored IRA structure; distribution rules matter | Contribution/investment/distribution restrictions apply | Open |
UTMA / UGMA | Flexible custodial gifting | Custodian controls until the statutory transfer age | Child-owned taxable assets; kiddie-tax rules can matter | Assets become the child's property | |
Roth IRA for a child | Child has legitimate earned income | Retirement account for the child | Potential tax-free qualified Roth growth/withdrawals | Contribution requires eligible compensation and annual limits | Open |
Trust | Custom control, inheritance or advanced planning | Depends on trust terms and trustee powers | Highly structure-specific | Legal complexity, cost and tax rules | Open |
Life-event mode
What is happening in your family?
MyFriendAlex checklist
New baby
1. Review health coverage and dependent enrollment
2. Update beneficiaries
3. Review emergency savings
4. Consider life insurance needs
5. Review will/guardian nominations
6. Choose a kids savings strategy
Educational overview only. Account ownership, tax, financial-aid, estate and state-law consequences vary by family and jurisdiction.