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SIE practice questionmediumAccount Types – Minors and Control

Which statement about a custodial account is correct?

  1. AThe minor can direct investments at any age
  2. BThe custodian is the beneficial owner
  3. CThe minor is the beneficial owner, but not the account manager✓ Correct answer
  4. DThe account is closed when the child turns 13
Explanation

Why C — The minor is the beneficial owner, but not the account manager

In custodial accounts (UGMA/UTMA), the minor owns the assets but the custodian manages them until majority. The account is not closed at age 13 and the minor cannot manage the account while underage.

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