A recent Wall Street Journal article by Hannah Erin Lang (“She’s 7 Years Old. Her Parents Are Saving to Support Her When She’s 30.”, Aug. 25, 2025) highlights a growing trend: parents are
planning not only for their children’s childhood costs and college, but also for financial support well into adulthood. As costs like housing, student debt, and lagging wages make independence tougher, many parents are starting very early to save with the intention of helping their children when they are fully independent – not just for education.
The wisdom in this shift is clear – and UTMA (Uniform Gifts to Minors Act) accounts are an especially flexible, often under-used tool that fit perfectly for this kind of long-term, broad-support savings plan. Here’s how UTMA accounts align with what today’s parents are trying to do, plus ideas for getting started.
The Case for Early, Broad Financial Support
From the WSJ reporting:
- Many parents are now accepting that helping adult children isn’t something to be ashamed of – it’s often necessary.
- Rather than waiting until college or some milestone, parents are beginning savings when children are young so they can provide ongoing assistance once children are beyond school and entering full adulthood.
- Survey data show about 60% of parents with children ages 18 – 34 helped them financially in the past year – not just with tuition, but for housing, debt, and daily expenses.
- Financial advisers are encouraging proactive planning: setting aside funds now can grow to a meaningful nest egg for adult support. It’s like a living or early inheritance.
UTMA Accounts: What They Are & Why They’re Useful
UTMA accounts allow you to gift assets to a minor (under state rules), but with flexible usage. When the minor reaches the age of majority (varies by state), the account becomes theirs – but until then, you control the investments and distributions.
Some advantages for this kind of long-term parental support plan:
- Flexibility in use: The funds aren’t restricted to education. UTMA proceeds can be used for any purpose that benefits the child – housing, travel, medical costs, starting a business, or helping with living expenses when they reach adulthood.
- Tax benefits: Depending on income levels, minors often pay lower taxes on earnings in these accounts. (Always check current tax law.)
- Longer investment horizon: Starting when the child is young allows for compounding growth, so smaller monthly contributions now can become more substantial support later.
- Custodial control: Parents or guardians manage the account until the child reaches the age of majority, ensuring the funds are invested and used responsibly until then.
Things to Keep in Mind
- Control at maturity: Once your child reaches the age of majority, the funds legally become theirs to use.
- Impact on financial aid: UTMA accounts may be considered the child’s asset when applying for college financial aid.
- Taxes and reporting: Some earnings in a UTMA account may require tax reporting, depending on the amount.
How to Use a UTMA in a Long-Term Support Plan
Here are some practical steps to set this up thoughtfully:
- Estimate your goal: Think about what kind of support you might provide when your child is independent – housing help? Debt payoff? Help with rent or utilities?
- Start early: Even modest monthly contributions compound over time. A UNest UTMA account makes it easy to set up recurring contributions and invest for your child’s future.
- Invest wisely: Depending on your timeline, mix growth-oriented investments early and shift to more stable ones as maturity gets closer.
- Review periodically: As circumstances change (income, cost of living, child’s needs), adjust your savings plan.
- Communicate with your child: It helps to set expectations – that the account exists and might benefit them, but isn’t a guaranteed paycheck forever.
Starting early helps
The financial landscape for young adults has changed. Many parents recognize that helping adult children with life’s rising costs isn’t a luxury or a failure – for many, it’s a reality. If you have the ability, starting early and using flexible tools like a UTMA account can make a big difference.
If you’re ready to begin building a flexible savings plan for your child – one that can help in college and beyond – consider opening a UTMA account today. It gives you and your child freedom, growth potential, and peace of mind for the future.
