# Custodial Account

*Everyday Money — Finicade finance glossary*

A custodial account holds assets for a minor, managed by an adult until the child reaches the age of majority and the money becomes legally theirs. That handover is the defining feature and the usual regret: an 18- or 21-year-old can spend it on anything. Custodial assets also count heavily against the child in college financial-aid formulas, far more than parent-owned assets, which is why 529 plans are usually the better vehicle for education specifically.

**Also known as:** UTMA account, UGMA account, junior account

**Related terms:** [Joint Account](https://finicade.com/glossary/joint-account), [529 Plan](https://finicade.com/glossary/529-plan), [Beneficiary](https://finicade.com/glossary/beneficiary), [Capital Gain](https://finicade.com/glossary/capital-gain)

Source: https://finicade.com/glossary/custodial-account