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My Journey to Opening a UNest Account

by Garrett Gilbertson

A few years ago I did a self-audit where I consider the direction my life is going and what I needed to do to better align my behavior with my values. While my professional life was excelling I spent a considerable amount of time reflecting on my parenting. I was faced with the fact that I had not spent nearly enough time working to set my daughter up for success. She was 4 years old and I had not yet put away any money for her future. I knew I should be investing for her, but I had no idea how or what investment vehicles to use that would set her up for success later in life.

I set out to educate myself on what investments would offer the best returns, flexibility and tax advantages for my family. After reviewing the landscape of different investment and savings accounts for children I came to the conclusion that UNest was the best solution for my family. If you are like me and prefer flexibility, automation, and mobile access then continue reading as I intend to break-down why I decided to open a UNest account for my daughter.

UNest accounts are not explicitly designed as a savings account for a child’s college education. However, many parents utilize them for precisely this purpose and receive tax advantages. UNest’s custodial account’s main objective is to hold and protect assets for a child until they reach adulthood. These assets may be used for college or whatever your child needs in the future, e.g., a home, car, wedding, etc.

UNest accounts provide many of the benefits of a 529 plan while also giving greater flexibility for how parents use the funds. UNest accounts are an especially timely solution when heading into periods of economic uncertainty like we currently find ourselves with the pandemic. UNest accounts allow adult custodians to establish accounts on behalf of child beneficiaries. In contrast to 529 plans and Coverdell Education Savings Accounts, the additional flexibility combined with tax savings made UNests a compelling solution for my family.

Here are the questions I found myself asking prior to signing up for a UNest account. I summarized my findings below with the hope that they can help parents everywhere.

Am I eligible for a UNest Account?

Any minor can be named as the beneficiary of a UNest account. The custodian can be the child’s parent, grandparent, or another adult. The donor and custodian need not be the same person or entity. UNest launched UGift to make it easy for family members to contribute to your UNest accounts and incentivize them to set one up as a gift. This is great for me because it makes it easier for my parents to add money to my daughter’s account.

What Assets go into my UNest Account?

UNest accounts are permitted to hold nearly any type of asset, including stocks, bonds, mutual funds. UNest accounts’ ability to fit various securities for children’s benefit is a significant benefit because minors do not have the right to enter into contracts. A custodian of a UNest account has a fiduciary responsibility to manage the account’s assets. It is permitted for the minor’s benefit to modify the account’s asset allocation mix at his or her discretion. UNest is here to help parents and grandparents navigate this allocation with their age-based approach to investing! I appreciate this feature because it takes the guesswork out of picking my own investments.

How do I establish a UNest Account?

I only invest in companies that I trust that are aligned with my values. I realized after digging into UNest that the company was founded to address the large and growing disparity between wealthy individuals with financial planners and everyday Americans. Their goal for launching the UNest app is to close this gap and provide clients like me with the tools needed to invest in their children’s future without the high fees attached. They have accomplished this with their easy to use mobile app that you can download here. When a UNest account is established on their mobile app, a custodian and the account’s beneficiary must be named. Custodial ownership may be later transferred; however, the designated beneficiary is fixed and cannot be changed.

How Can I Contribute to my UNest account?

Anyone may donate to a child’s UNest account via the UNest app without limit. All monies received into a UNest account are the child’s irrevocable property – they may not later be reclaimed by the custodian or donor(s) under any circumstances. UNest is a great way to build a better future for your child by encouraging family members to contribute. It also results in a lot less wasted money on toys that are never played with!

How are UNest Accounts Taxed?

There are lifetime gifting limits on UNest accounts. The vast majority of Americans don’t have to worry about approaching these limits. The first $1,050 of earned income from investments in the UNest account is tax-exempt, and any additional income up to $1,050 is taxed at the child’s (most likely nominal) tax rate. Earned income from a UNest account above $2,100 is taxed at the parent’s s tax rate.

I hope, after reading this, you realize that you don’t have to be super wealthy to make a meaningful difference in your child’s future. UNest proved to be the best vehicle to help me plan and execute an investment strategy for my daughter and I encourage you to check them out to see if they are a fit for you too. Regardless of what you chose consistency is key and the earlier you start the better position you will be for long term success.


This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, UNest does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information.