UGMA Custodians

Responsibilities of the Custodian

The custodian has a fiduciary duty to manage the account prudently for the benefit of the minor child within certain guidelines. Such as:

No margin accounts
No high risk securities, such as penny stocks
Custodian may not borrow from the account
No commodities
No speculative option strategies
Custodian may not give discretion to a third party
All distributions must be reinvested within a reasonable time
The custodian may not let rights or warrants expire. They must be exercised or sold.
The custodian must provide support for all withdrawals from the account
Withdrawals may only be made to reimburse the custodian for expenses incurred in connection with the operation of the account or for the benefit of the minor

Questions relating to custodial and UGMA accounts appear on the series 6 exam, series 7 exam, series 24 exam, series 26, exam, series 62 exam, series 65 exam, and series 66 exam

take some free exam questions on our site at www.securitiesce.com