Most states have variations on the UGMA (sometimes called a UTMA), which allows anyone to transfer ownership of assets or an investment to a minor.

• You can contribute up to $13,000 in 2012 to a UGMA account, $14,000 in 2013.
• You can transfer cash, any mutual fund or stock, or property to the account.
• Withdrawals are taxed at the recipient's rate.
• The money belongs to the recipient, not to you. You can, however, act as a custodian until the recipient reaches a set age. That age varies from state to state.
• UGMAs can be used for anything (except parental obligations), not just college costs.

The biggest problem with the UGMA is the control you surrender. If junior would rather spend the account on a new car rather than college, he can. It's his money.

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