All of the registered trade names are used by, and refer to a single FDIC-insured bank, Green Dot Bank. Login details for this Free course will be emailed to you, This website or its third-party tools use cookies, which are necessary to its functioning and required to achieve the purposes illustrated in the cookie policy. Contact us today for a consultation. There are several types of trust accounts designed for a variety of different financial planning purposes. Since the minor child or beneficiary of the account is the legal owner, you have a fiduciary responsibility as custodian or guardian to act in the best interests of the owner and beneficiary. Custodial accounts are available at most banks and credit unions for parental control of their minor children's accounts. The most significant advantage of this kind of account is that it keeps the money of dependent people safe and secured until the right time. The answer is pretty easy.
The basic idea of a trust account is to designate another party to hold on to your assets, and possibly manage them, too. Sometimes, practical knowledge and experience trumps all else. Custodial accounts and trust accounts are similar. Further, it can be used to invest funds in a variety of assets, but it depends upon the financial institutions whether to accept the investment in a particular asset. Trust accounts can be set up in a variety of ways to meet specific account requirements on how and when to use the assets. A custodial account is like a regular saving account. Neither Green Dot Bank nor Stash offers overdraft services. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented. Guardian accounts must start with formal court action naming a legal guardian, who then manages the money for the benefit of someone known as the "ward." The responsibility of managing the account falls to the custodian. The custodial account comes with a significant level of flexibility since there are no specific limits of income or contribution. Green Dot is a registered trademark of Green Dot Corporation. However, custodial accounts have a specific purpose, which is narrower in scope than a trust account.
The accounts also provide tax advantages and more privacy in asset dealings. Parents, grandparents and family members set up these accounts for minor children. This investment recommendation relies entirely on the responses you’ve provided regarding your risk tolerance.
This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. A trustee can be an individual, a stockbroker, a bank or any other organization that has the right to govern a trust. You need to be a member in order to leave a comment. In order for a user to be eligible for a Stash Banking account, they must also have opened a taxable brokerage account on Stash. I assume the bank would prefer to be a custodian, and not a directed trustee, to avoid fiduciary liability, although I'm not sure that works in all cases. Custodians, in those scenarios, are banks or financial entities responsible for handling the assets in your retirement fund. You may even create multiple different trusts with different beneficiaries or purposes. Trusts are generally more complicated and expensive to set up than custodial accounts, so it is important for parents and grandparents to consider their options carefully when making such an important choice. Trusts allow for a significant degree of control over assets since you can specify the terms of the trust.