Private Wealth & Custodial Trust Pure Edge Computation

UGMA / UTMA Custodial Account Growth, Kiddie Tax & FAFSA Sizer

Model minor custodial trust wealth accumulation with compound market returns, IRS Kiddie Tax thresholds on unearned income, and college financial aid FAFSA assessment impacts.

Formula: FV = PV*(1+r)^n + PMT*[((1+r)^n - 1)/r]; FAFSA Assessment = FV * 20%

Model Parameters

Initial Custodial Principal Deposit ($)

Starting cash or securities balance deposited into the UGMA/UTMA custodial account.

Ongoing Monthly Custodial Deposit ($)

Recurring monthly contribution made to the trust account.

Projected Annual Portfolio Return

Expected annual compound growth rate across invested equity/bond indexes.

Child Current Age (Years)

years

Current age of the custodial minor beneficiary.

State Statutory Age of Majority

years

Statutory age at which beneficiary takes full legal control of account assets (typically 18 or 21 depending on state UGMA/UTMA statute).

Outputs & Underwriting Summary

Calculation Status

COMPOUNDING EFFICIENCY ACHIEVED

Verified Model

Projected Value at Age 18

$88479.77

Total Growth: $39479.77 | Contributions: $49000.00

FAFSA Student Asset Assessment

$17695.95

Assessed at 20% student asset weight (vs $4990.26 for 529 parent rate)

IRS Kiddie Tax Form 8615 Threshold

$2600.00 annual unearned exemption

Excess unearned income over $2600.00 taxed at parent's marginal bracket | 13-year horizon

Over a 13-year custodial horizon (age 5 to 18), $49,000.00 in contributions compounds to $88,479.77 ($39,479.77 in market earnings at 7.0% annual return). FAFSA assesses this account as a student asset at 20% ($17,695.95 reduction in financial aid eligibility) versus only 5.64% ($4,990.26) for parent-owned 529 plans. Annual unearned income exceeding $2,600.00 triggers IRS Form 8615 Kiddie Tax at the parent's marginal rate.

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