I am planning on opening two individual brokerage accounts in mine and my husband’s names for our kids. I want to eventually give them access to this money when they are around 25. When that time comes, how do we go about doing that? Do they have to then open their own brokerage accounts in their names and then do a balance transfer? Will the money be taxed when it’s transferred?
Hi @dparra!
Yes, transferring the money into their account is an easy way to do it.
Gift tax rules will apply. In 2022, this means that you and your partner can each give $16K to each child and you will be below the gift tax exemption. Anything higher than that is not taxable, but it does count against your lifetime exemption (currently at $12M for each you and your partner).
It sounds like you already have a game plan, but if you haven’t read it already, here is PFC’s article on investing for children!
Let us know if you have any other questions!
Shane