Assets may be transferred from an UGMA/UTMA account into Future Scholar, but there are significant legal and tax considerations that should be considered:
- Because the custodian of an UGMA/UTMA must first sell the assets in the UGMA/UTMA account, the sale of the UGMA/UTMA assets may generate taxable gains.
- When the custodian invests in Future Scholar, the beneficiary of the Future Scholar account must be the same as the beneficiary of the UGMA/UTMA account and cannot
by changed. This means that the Account Owner will not be able to change the Beneficiary of the Account and may not authorize any distribution from the Account unless
the distribution is for a use permitted under law governing the UGMA/UTMA custodial account.
- For financial aid purposes the assets are treated as those of the student, since the custodial status takes precedence over the 529 plan (529 plans that are not
under Trust or custodial registration are treated as assets of the account owner for financial aid purposes.
- Proceeds check must be made payable to Future Scholar, (name of custodian) Cust. (insert UGMA/UTMA, as applicable, followed by the pertinent state) FBO
(name of Designated Beneficiary).
Please consider the investment objectives, risks, charges and expenses carefully before investing in the Future Scholar 529 College Savings Plan. Contact
your financial advisor or Columbia Management for a Program Description, which contains this and other important information. Read it carefully before investing. You
should consider, before investing, whether the investor’s or designated beneficiary’s home state offers any state tax or other benefits that are only available for
investments in such state’s qualified tuition program. Columbia Management Investment Distributors, Inc., distributor and underwriter.
This information does not constitute tax or legal advice. Neither the State Treasurer, Columbia Management Investment Advisers, LLC, nor its affilates, provide tax or
legal advice. Please consult your tax advisor before making tax-related decisions.