Custodial Agreement

AAA

DEFINITION of 'Custodial Agreement '

An arrangement whereby one holds an asset or property on behalf of the actual owner (beneficial owner). Such agreements are generally entered into by state agencies or companies to administer various benefit programs.

INVESTOPEDIA EXPLAINS 'Custodial Agreement '

An example of a custodial agreement would be a company retirement plan. Many, if not most, companies hire a third party to administer such plans: to collect payments from the employer and employees, invest the funds and disburse the benefits. The advantage of this arrangement is that the beneficial owner gets professional advice, which saves time, and often pays lower fees than would otherwise be available had the monies been handled by each individual owner.

RELATED TERMS
  1. Final Return For Decedent

    The final tax return filed for an individual in the year of that ...
  2. Primary Beneficiary

    A beneficiary in a will, trust or insurance policy that is first ...
  3. Estate Tax

    A tax levied on an heir's inherited portion of an estate if the ...
  4. Heir

    HeirA person who inherits some or all of the estate of another ...
  5. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  6. Inheritance

    All or part of a person's estate/assets that is given to an heir ...
RELATED FAQS
  1. What impact does inflation have on the time value of money?

    The impact that inflation has on the time value of money is that inflation decreases the value of a dollar over time. The ... Read Full Answer >>
  2. Why choosing the right investment adviser is crucial for your portfolio's health

    Just as finding a good mechanic will help keep your car running smoothly, finding a good broker or financial advisor can ... Read Full Answer >>
  3. What is the difference between portfolio management and financial planning?

    Utilizing the expertise of a financial professional can be beneficial to an individual wanting to reach an investment goal ... Read Full Answer >>
  4. What advice has Richard Branson given to would-be entrepreneurs?

    Richard Branson, founder of Virgin, is one of the world's most prolific entrepreneurs and has imparted his wisdom to others ... Read Full Answer >>
  5. What advice has Jeff Weiner given to would-be entrepreneurs?

    Jeff Weiner, the billionaire CEO of LinkedIn, is known worldwide as a phenomenally successful entrepreneur and a major influencer ... Read Full Answer >>
  6. Should I attempt to trade futures myself using software, or is this better left in ...

    The question of whether to do your own futures trading or opt for a managed account that a professional trades on your behalf ... Read Full Answer >>
Related Articles
  1. Professionals

    How to Prep Your Portfolio for Down Markets

    Down markets are a reality that can kneecap your retirement withdrawal plans. Minimize the pain with these strategies.
  2. Personal Finance

    A Guide to Financial Education for Doctors

    Doctors need to choose the educational option which best fits his or her time, schedule and learning preference. Here's a guide.
  3. Professionals

    Top Retirement Planning Tips for Singles

    Single clients often face an uphill battle when it comes to retirement planning. Here are some tips to get them on the right path.
  4. Professionals

    How Advisors Can Help Clients Spot Elder Scams

    Financial crimes against the elderly are on the upswing. Here's what financial advisors can do to help protect their most vulnerable clients.
  5. Professionals

    Advisors Should Consider a 'Dementia Protocol'

    Diminishing mental capacity can strike any aging client, that's why advisors should push clients and their families to incorporate a 'dementia protocol.'
  6. Professionals

    5 Vital Questions Advisors Should Ask New Clients

    By asking the right questions, listening and building trust, investors and their financial advisors can get the most out of their relationship.
  7. Personal Finance

    10 Tips To Avoid Common Financial Scams

    Remember that "don't talk to strangers" rule from childhood? Well, don't wire them money either. Or fall for these other tricks.
  8. Professionals

    Top Tips for Retirement Account Withdrawals

    Top things you need to know when it comes to managing the complex task of retirement account withdrawals.
  9. Professionals

    Mutual Funds: How Many is Too Many?

    How many mutual funds are too many when it comes to a well diversified portfolio?
  10. Taxes

    Tips on Charitable Contributions: Limits and Taxes

    An overview of the limits and tax deductions of charitable donations.

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center