hard · Certified Financial Planner General Principles
Mateo Ibarra, age 14, has seen significant growth in his $22,000 UTMA account. His mother, Elena, asks the planner to immediately liquidate the account and move the proceeds into her parent-owned 529 plan to "protect the money from Mateo's future spending."
Which action should the planner take first according to the CFP Board Practice Standards?
- Explain the tax consequences of the 32% marginal rate on the UTMA's embedded capital gains. In this case
- Discuss Elena's underlying concerns and clarify the family's long-term goals for Mateo's autonomy.
- Draft a new Investment Policy Statement (IPS) for the parent-owned 529 account.
- Recommend an immediate 1035 exchange into a variable annuity to preserve the tax deferral.
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