SIE Exam Practice Question 664
Question: 664
All but which of the following are correct regarding a UGMA/UTMA account?
Correct Answer: C
Explanation:
Unlike a 529 plan, funds in a UGMA/UTMA account do not grow tax-deferred. However, the funds in the UGMA/UTMA account do not need to be used to pay for education expenses. The custodian, typically the minor's parent, does not own the assets in the account. Once the account is set up, it's considered to be an irrevocable gift.
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