The security must be registered with the proper designation of the custodian, the minor, the name of the state, and the title of the Act. The shares are registered in the name of the custodian for the benefit of the minor; however, the minor’s social security number is used to establish the account.
Correct Registration
JOHN DOE, AS CUST FOR MARY DOE
UNDER THE CALIFORNIA UNIF. GIFTS TO MINOR ACT.JOHN DOE CUST MARY DOE
CA UNIF. GIFTS TO MINOR ACT.
As donor do I need to be the custodian?
No, you can designate yourself or another adult to be the custodian.
As custodian can I transfer the stock back into my name?
No, the stock is the property of the minor and the gift is irrevocable. You cannot transfer the shares back into your or another name.
What happens when the minor reaches the age of majority?
The custodian will need to transfer the shares into the minor’s name. The following documents are required to complete the transfer:
1. Stock Transfer Form with medallion signature guarantee stamp,
2. Stock certificates intended to transfer, and
3. A copy of the minor’s birth certificate.
What happens when a custodian dies?
In most states, a successor custodian is appointed by the court. The court may appoint an adult member of the minor’s family or appoint a guardian.
1. Stock Transfer Form with medallion signature guarantee stamp,
2. Stock certificates intended to transfer,
3. A copy of the death certificate of the deceased custodian, and
4. A certified copy of the certificate of appointment of the successor custodian, dated within sixty days of the transfer.
What happens when a minor dies before reaching the age of majority?
Unlike a trust, custodial accounts do not allow you to designate what happens to the asset if the minor dies before receiving it. The shares become part of the minor’s estate. The certificate registered with the custodian clause should be endorsed by the custodian with a medallion signature guarantee stamp, thus terminating the custodianship. The following documents are required to complete the transfer:
- Stock Transfer Form with medallion signature guarantee stamp,
- Stock certificates intended to transfer, and
- A copy of the minor’s death certificate.
Trust registration
A trust is a legal entity created by a trustor (also known as grantor, settlor, and maker). The trust holds assets for a person or group who are called beneficiaries. The trust is controlled by one or more trustees. A trust that you create while you’re alive is called a “living trust” (also called “inter vivos”) as opposed a testamentary trust which is created by the last will and testament of the deceased. If the trust is revocable, you can change the articles of the trust at any time. If cannot change the articles of the trust, it is considered irrevocable.
To avoid complications it is important to provide a complete disclosure of the trust when requesting certificates to be registered into the trust. In a living trust, if the beneficiary is different than the trustee, the beneficiary should be included in the registration. We will need:
1. The name(s) of the trustee(s)
2. The nature of the trust,
3. The maker of the trust,
4. The date of the trust, and
5. The beneficiary(s) of the trust
Correct Registration
JOHN DOE REVOCABLE LIVING TRUST
JOHN DOE, TTEE
U/A DTD 01/01/2001JOHN DOE REVOCABLE LIVING TRUST
JOHN DOE, TTEE
U/A DTD 01/01/2001 FBO JIMMY DOE (in this case, Jimmy is the beneficiary)
Wrong Registration
JOHN DOE TRUST (incomplete name of trust, no type provided)
JANE DOE, TTEE
U/A DTD 01/01/2001JOHN DOE TRUST (no trust date)
JANE DOE, TTEE