College Fund for Stepdaughter

Updated on October 01, 2010
N.S. asks from Buffalo Grove, IL
9 answers

I really want to start setting aside money for college for my stepdaughter. I really want the money to be protected from her mom and I want to assure that it will be used by my stepdaughter for college or some type of training.

I've started looking at college savings plans, but what if she chooses not to go to a regular college? Do these plans still allow her to take the money out? She has been talking about getting training in our church which would not be regular college. Will we be better off putting it in some kind of savings account? How can we protect the savings account? If we put just my husband's name on it and my daughter's, will it be protected from someone else taking it out since she's under 18?

I've heard too many stories of the "other parent" squandering away the college fund and I want to make sure it doesn't happen. Any advice is welcome.

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So What Happened?

Thanks for the advice so far! I forgot that she might have to file a tax return on the money and that would NOT be good because her mother claims her on taxes every other year (which isn't fair because she lives here most of the time but it's a small price to pay for our sanity). I don't want her mom even knowing that the money exists.

I'm seeing that putting the money in my husband's and my name is a far safer route. Plus if my stepdaughter gets scholarships we can continue to save for after she graduates. If anything that's a tougher time than being in college!

More Answers



answers from New York on

When we were born, my grandmother set-up a Certificate Account through her credit union for each of us. The account was in her name, but "in trust" for us- meaning that no one but my grandmother could touch it until we turned 18. That money was for us to have for school, purchasing a home, whatever- she added to it for each occassion and it ended up being more than adequate to fund my graduate program.

Speak with someone at the bank- they know how to do this! The 529's are good too and we just did one for my son!

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answers from Boise on

There is the 529 that is for education only. The reason that I opted out of this is if they decide not to go to college or get a scholarship, it can be transferred to a relative only, but would be penalized to just empty it. We did an investment account for college. It is in our names, so that if our kids decide to not go, or if they get scholarships, it could just become our vacation fund. We also don't plan to tell them about it, or tell them that it is "their" money. Of course, as they start thinking about college, they will know that they don't need to worry about the financial side of it, but it isn't THEIR money to do with as they want either.

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answers from Columbus on

I would speak with a Financial Advisor and see if a 529 plan or Coverdell ESA would be best for her. I know 529 plans have more strict guidelines regarding what the money can be used for.
Either way, you or your husband could be the custodian and her mom would not be allowed to touch the money (she doesn't even need to know about it).

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answers from Pittsburgh on

529 plans are for any kind of further education and yes, if the mother's name is not on the account, she will not have access to it.

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answers from Kansas City on

I would put it in my name until it's time to give it to her, for 2 reasons: 1, so that her mother cant in any way get access to it, and 2, if a kid has enough money in their name (even a savings account) sometimes they have to turn in a tax return, and that seems silly.

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answers from Chicago on

We put money in a 529 plan for both my kids since the day they were born and when the market dropped, so did their funds. I'd stay away from 529 plans.


answers from Dover on

If you or your husband are on the account as guardians while your step daughter is a minor, only you and she will have access. Some banks restrict minor's withdraws to w/ consent while others they have full access all along. Check w/ your local banking institution for the best options.



answers from Chicago on

What my DH and I are doing for the grand putting away our change in a jar and taking it to the bank every month or might not seem like a lot but we never give change when buying something so it adds up quick!! We are putting it into an account in our names. I told my Grandson (6) that the money is there for him to use for college and that the check would be made out to the college!!!! And......if he didn't go to school or training...... Grandma is going on a trip!!!! :)


answers from Austin on

Wow, you are a great Stepmom and smart too..
Look into your states College fund. My mother did the Texas Tomorrow fund and yes, it will allow the child to decide, what type of College or ACCREDITED training schools..

Here in Texas the fund now works so that you decide which plan you want to purchase. It can be based on in state Tuition price or Out of State tuition price.
IF your stepdaughter decides to not go to any school or to a non accredited training school, she will receive the amount paid and a small percentage.

To give you an example if she decides to attend college.. My mother purchased one of these funds for our daughter when our daughter was 7 yrs old. At that time my mother paid the amount of in State Tuition was $900. per year. It is now $7200 per year.

So in total my mother paid $3600. (we had no idea at the time our daughter would go out of state) Our daughter will now receive at least $29,000 total.This is paid directly to the college.

Our daughter attends an private out of state college and it is $58, 000 per year for Tuition, Room and Board. She has received academic scholarships, grants and of course this Texas Tomorrow fund has helped tremendously.. Remember we still have to pay for her medical insurance, books, fees and transportation, with living expenses.

So yes, there are many options. Call your state offices and find out what they offer.. I also suggest you speak with your credit Union and see what they have to offer.
You and your husband can be the co signers with step daughter. Explain you do not want this money touched by anyone else.. They handle this type of thing all of the time..

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