Custodial accounts formed under the Gifts to Minors Act or the Uniform Transfers to Minors Act offer a simple way to transfer money to minors to prepare for college expenses. The accounts, which are taxable to the beneficiary, may hold assets including real estate and are exempt from the gift tax up to $13,000 annually. The accounts are best suited for creating small- or medium-size funds for the benefit of the minor beneficiary.

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