**Custodian** (noun) — A person appointed to hold and manage property on behalf of another, particularly for minors under laws like the Uniform Transfers to Minors Act.
A custodian holds and manages property for someone else—most commonly for children who aren't old enough to manage property themselves. The custodian controls the property until the child reaches the age specified by law (often 18 or 21).
This arrangement is simpler than a trust. Under uniform transfer to minors acts, you can leave property "to John Smith as custodian for Emily Smith under the [State] Uniform Transfers to Minors Act." John manages the property for Emily until she reaches the specified age, then hands it over.
Custodians have broad authority to use the property for the minor's benefit—education, support, maintenance. They must keep the property separate from their own assets and manage it prudently, but don't face the same formal requirements as trustees.
⏱ When you'll encounter this term
Custodianships are commonly used for modest gifts to minors. Instead of leaving money directly to a child (which creates management problems) or creating a full trust (which might be excessive for smaller amounts), you appoint a custodian.
The custodian must follow the relevant uniform act's rules about how property can be invested and spent. They should keep records but typically don't file formal accountings with courts like trustees might.
You'll encounter custodianships in wills leaving property to minors, life insurance beneficiary designations, retirement account designations, and investment accounts set up for children. The arrangement ends automatically when the minor reaches the specified age—no court proceeding required. The custodian simply turns over the property and the custodianship concludes.
**Related terms:** [Guardian](/dictionary/guardian), [Minor](/dictionary/minor), [Trust](/dictionary/trust)
---
"Grandpa left $50,000 to my daughter with my brother as custodian. He manages the money for her benefit until she turns 21, then hands it over to her."