Why should I open a UNest account?
UNest makes it easy for parents to invest in their children’s future with a simple, flexible, and tax-advantaged custodial account* for minors.
What can I use the funds I save in UNest for?
UNest is more flexible than other saving accounts that can only be used for education. Funds saved can be used across any of your child’s life events like college, their first car, down payment on the house, wedding day or any other important milestones.
What are the tax benefits of a UNest account for my child?
In 2024, up to $2,600 in annual earnings in a UNest Investment Account for Kids may grow in a tax-advantaged way. The first $1,300 of the earnings may be completely tax-free. The next $1,300 is taxed at the child’s tax rate. Anything exceeding $2,600 is taxed at the parents’ tax rate. This threshold is only applicable to gains in the account and not to the original contributions.
Where is my money held?
Investment accounts are held with our trusted partner and custodian, Apex Clearing Corporation, a third-party SEC registered broker-dealer and member of FINRA and Securities Investor Protection Corporation (SIPC). This means the investments in your account are protected up to $500,000 in total.
When can my child access the money in their UNest Investment Account for Kids?
Children can access funds in their UNest account when they reach adulthood. This may be anywhere from 18 to 25. Your state of residence will determine which rules apply to you.
Is my account insured?
All UNest investment accounts are insured by Securities Investor Protection Corporation (SIPC) for up to $500,000 (up to $250,000 for cash claims).
Why invest in a UNest custodial account instead of a 529 plan?
Both 529 plans and UNest custodial accounts provide a great tax-advantaged way for parents and others to help save for a child’s tuition and other educational expenses. UNest’s Investment Account for Kids offers a significant benefit to parents that are looking for a flexible way to save for all the future life stages your child will experience. This may or may not include education.
In contrast to 529 plans that can only be used for qualified educational expenses, you can use the funds you invest in UNest for any expense that benefits the child named on the account. If an account holder uses funds from a 529 plan for non-education related expenses, they lose tax advantages and earnings are subject to a 10% penalty.
Is my money safe?
Security is a priority for UNest. UNest provides the highest levels of security to ensure your information and data is safe. All accounts are protected with 256-bit SSL encryption and continually monitored for extraordinary or suspicious activity by our Compliance team.
In addition, investment accounts are held with our trusted partner and custodian Apex Clearing Corporation, a third-party SEC registered broker-dealer and member of FINRA and Securities Investor Protection Corporation (SIPC). This means the investments in your account are protected up to $500,000.
Is UNest an investment advisor?
Yes, UNest Advisers, LLC is a registered investment advisor (RIA) with the U.S. Securities and Exchange Commission (SEC).
What is UTMA/UGMA?
They are investment accounts with a custodian for the minor. The Uniform Gift to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) allows the custodian, such as a parent, grandparent, relative, or friend, to open an account for a beneficiary, such as a child or grandchild. When the custodian sets up the account, the custodian picks what age the beneficiary will take control of the account. This is normally between 18 and 25, depending on the state the custodian resides. This investment account for children may receive up to $2,600 in annual tax benefits on the earnings portion. UNest Investment Account for Kids leverages the benefits of UTMAs.
Which is better, UGMA or UTMA?
The biggest difference between UGMA and UTMA accounts is that UTMAs allow for more types of assets. While UGMA accounts are typically limited to things you find in most IRAs like stocks, bonds, and mutual funds, UTMAs can also hold things like real estate, art, patents, and even cars.
How will the funds be made available to the child?
On reaching the age of majority, usually 21 years, the minor is entitled to all assets held in the account. UNest will convert the account to the individual brokerage account in the name of the child and your child will be able to continue saving and investing for as long as needed if he/she doesn’t need funds for any immediate needs.
What happens with the account if the custodian of the account dies?
If the custodian of the account dies, a new custodian must be named. The custodian may name a successor upon death by reaching out to UNest customer support. If a successor is not designated and the minor is over age 14, the minor may appoint a successor using a notarized letter.
If something happens to the minor before reaching the age of majority, the account becomes part of the minor’s estate. If the minor does not have a will, the parents would most likely inherit the estate.
