Custodial Account
An account opened on the behalf of a minor by an adult who acts as custodian. The custodian is usually one of the child’s parents–both parents cannot be custodian. This type of account is opened because minors cannot enter into contracts. Thus, they cannot make securities transactions for themselves. Any assets placed into a custodial account are irrevocable. Once the minor is of majority (usually 18, but some states are 21), they may do what they please with the assets.
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