Which statement describes a Custodian Account?

• A. Guardian manages funds for ward of the state
• B. Adult maintains control/approval of account until minor reaches adulthood
• C. Opened by an entity to conduct business
• D. The funds must be deposited in a safe box

Answer: (B)

A custodian account is an arrangement where assets are held for a minor, with an adult custodian who controls and manages the account on the minor’s behalf until the minor reaches the age of majority. The custodian makes investment and distribution decisions and has a fiduciary duty to act in the best interests of the minor. At adulthood, control typically passes to the minor. This setup is about private gifts or transfers to a child, not guardianship by the state, not a business account opened by an entity, and not requiring funds to be kept in a safe deposit box. So the statement that an adult maintains control until the minor becomes an adult best describes a custodian account.