Many families establish custodial accounts at a bank or a broker for the benefit of the minor child or grandchild.
A donor may make a lifetime transfer to a custodial account. A testator under a will or settlor under a trust agreement may authorize the fiduciary to establish a custodial account to hold a distribution to be made to a minor.
Ohio law recently changed to allow greater flexibility in establishing custodial accounts for minors under the Ohio Transfers to Minors Act.
First, a donor may stipulate that a custodial account terminate after the minor reaches age 21, but no later than age 25. Under prior law, the maximum age of the minor for the custodial account to terminate was 21.
Also, an executor or trustee may establish a custodial account for minor to receive a testamentary inheritance to up to $25,000 without court approval. Previously the limit was $10,000.