Please tell me if you find this odd....

My DS godmother asked for his christening if she and godfather could set up a college fund for him (through her job). It is an account that can ONLY be used for college and it is set up to gain $ off of the stock market. I agreed that she could - thinking that it was just going to be between her/him/me/dh. It turns out that she is the only one who can make deposits and/or adjust/access the plan in anyway. I also have a regular bank savings account for DS. Now, with DS 1st birthday coming, most of my family members want to just put $$ into this plan. I am just a little uncomfortable because I feel like who gives a kid a gift made out to the godmother, KWIM? It is not that I don't trust her, because I do 10000%, It just sits a bit odd with me and I also am not a fan of "playing" the stock market, especially with my kids money.

Would you think it is odd or is this normal?

Thoughts?

ETA - I am being told by family that I am totally wrong, they think I am ungrateful and crazy.

Message edited 8/18/2009 9:16:13 PM.

Re: Please tell me if you find this odd....

that is very strange to me,

Re: Please tell me if you find this odd....

I think its fine that the godmother does this.. If she knows what she is doing thats great.

what bothers me and this is why we didnt open up this kind of plan (529) is because you are playing with the stock market and can lose the money..

Re: Please tell me if you find this odd....

I guess it all depends on how the plan works...if this is the way it is...so be it.

I will honestly tell you that if I were giving a gift to Anthony I would not write a check out to the godmother. It just wouldn't sit right....not that I think she's doing something wrong but I hate mixing that stuff. My check would go straight to him for you to decide what to do. If you wanted to cash it and in turn roll it over to the GM that's cool...but I wouldn't go straight to her as a guest. Just a personal thing.

Ultimately it sounds like her intentions were good all along and it's very sweet. If your family is comfortable with it...let them do it.

Re: Please tell me if you find this odd....

I would let her keep the account for him - and she can do what she wants with it.

Take the $$ from his birthday and either open a 529 or put it into his other account.

Re: Please tell me if you find this odd....

Re: Please tell me if you find this odd....

Re: Please tell me if you find this odd....

Re: Please tell me if you find this odd....

I would let her have this account and hopefully she will continue to deposit into it, and your DS will have it for college.

In the meantime, open up a 529 asap.

Re: Please tell me if you find this odd....

Also check with a financial advisor bc a 529 in his name could hurt his applications for student loans, should he need them when he is ready for college.

Re: Please tell me if you find this odd....

My MIL did something similar for all her grandkids, but she set up trust accounts at the credit union...she is fully in charge of the account and only she can make deposits (though checks can be payable to her or to grandchild)...

But the funds are secured like a regular savings account...I wouldn't want something that was playing/gambling with the stock market...especially if people are giving gifts into the account.

Re: Please tell me if you find this odd....

Re: Please tell me if you find this odd....

My sister who is my DD Godmother set up an account for DD but its not a 529. Only she puts money in it and would never take funds from others to put in it. She did it so she just didn't give her meaningless junk and gave her money to use later. I think its super generous.

BUT she is the only one who adds to the account. I would think it odd if other put money for DD in this account.

Re: Please tell me if you find this odd....

Posted by CkGm

My sister who is my DD Godmother set up an account for DD but its not a 529. Only she puts money in it and would never take funds from others to put in it. She did it so she just didn't give her meaningless junk and gave her money to use later. I think its super generous.

BUT she is the only one who adds to the account. I would think it odd if other put money for DD in this account.

Re: Please tell me if you find this odd....

Re: Please tell me if you find this odd....

I believe that each 529 account typically has one depositor who is an adult, not the child. I do not think that it can be set up so that checks made to the child or anyone other than the account holder can go into that account.

I believe whoever deposits the money gets a tax benefit for the year in which they deposit it. So if someone gives money to the G-dmother to deposit, is she then claiming the benefit as if she had deposited her own money?
I am not totally sure of this, so check on it first if you want to inquire about her intentions.

I would be totally fine with a G-dparent creating an account for my child but I would not add funds to that account and I would not want anyone else to.

You can open a separate 529 account that you control. There does not have to be just one for a specific child.

Accountants can give you more information about these accounts.