A Custodial account
is a financial account set up for a minor
, but administered by a responsible adult, known as a custodian
, because the minor is under the legal age of majority
. The custodian is often the minor's parent. A custodial account can be everything from a bank account
to a trust fund
. This type of account usually come with a Coverdell ESA
Form a tax advantaged contract. It deals with successor rights and other contract conditions depending on who issues the form.
In another form, a Custodial Account is an account owned by an individual or institution, managed by a named party for purposes of rapid distribution of funds in that account. This is commonly used for petty cash or for transactions that have very limited and clearly defined payees and transaction types.