Kids’ Investment Accounts in Texas

Texas sets two rules that shape how you save for a child here: a UTMA custodial account transfers to the child at 21 (a UGMA at 18), and it has no state income tax, so there's no 529 deduction to claim and no state tax on 529 withdrawals.

When the account becomes theirs

A custodial account Texas is yours to manage until your child reaches the age of trust termination — 21 for a UTMA, and 18 for a UGMA. On that date the balance is unconditionally your child’s: they can withdraw all of it, for anything, with no approval and no way to reverse it.

For the full breakdown of Texas’s transfer age — how it compares nationally and the exact extension rules — see the dedicated Texas UTMA age of majority page.

529 tax treatment Texas

Texas levies no individual income tax, which simplifies the 529 question: there’s no state income-tax deduction to claim on contributions, and 529 withdrawals aren’t exposed to state income tax either. You can use any state’s 529 plan purely on its own merits — fees and investment options — since no in-state tax break is on the table.

Putting it together

The custodial-account age is about control — when the money becomes your child’s. The 529 rules are about taxes — what the state gives you for saving toward education. They’re independent decisions, and many families use both: a UTMA for flexible, any-purpose saving and a 529 for education, each doing what it does best. Whatever mix you choose, seeing all of it in one place — years before any of it transfers — is exactly what MemoryBank is for.

Frequently asked questions

At what age does a custodial account transfer to my child Texas?

In Texas, a UTMA custodial account transfers to the child at 21, and a UGMA at 18. The account's titling can override the default, so confirm how yours was set up with your custodian.

Does Texas offer a 529 state tax deduction?

Texas has no individual income tax, so there's no 529 state income-tax deduction to claim — and no state income tax on 529 withdrawals. You can choose any state's 529 plan on fees and performance.

Can I deduct contributions to another state's 529 plan Texas?

Texas has no state income tax, so there's no deduction either way — you're free to pick any state's 529 plan on fees and performance.

What happens when my child turns 21 Texas?

The custodial account becomes fully theirs. They can withdraw the entire balance and use it for anything, with no approval from the custodian and no way to reverse it. For a large balance, that handover is worth preparing for years in advance.

Note: State statutes and 529 tax rules change, and how a custodial account is titled can override the default age. This is general education, not legal or tax advice — confirm Texas’s current rules with your custodian, your 529 plan, or a tax professional. 529 details reflect J.P. Morgan Asset Management, 529 plan tax benefits by state (Jan 2026).