Certified Financial Planner (CFP) Exam 2026 – 400 Free Practice Questions to Pass the Exam

The statement that UGMA (Uniform Gifts to Minors Act) accounts allow parents to access funds for the child when they turn 14 is inaccurate. In reality, funds in UGMA accounts are legally considered the child's assets and must be used for the benefit of the child. Once the child reaches the age of majority, typically 18 or 21 depending on state laws, they gain control of the account and can use the funds as they see fit. Therefore, parents do not have unrestricted access to the funds at age 14; rather, the funds are held for the child's benefit until they reach legal adulthood.

On the other hand, the American Opportunity Tax Credit is indeed available for post-secondary education and helps offset the costs of tuition and related expenses. The Lifetime Learning Credit, which provides financial assistance for a wide range of courses, is correctly described as being available for various degree programs, not just undergraduate ones. Additionally, Series EE United States Savings Bonds can be used for education expenses with favorable tax treatment, which allows for tax deferral until the bond is redeemed, making them a valuable option for education funding.