§ 33A-12. Care of custodial property. - North Carolina Statutes

§33A‑12.  Care of custodial property.

(a)        A custodian shall:

(1)        Take control ofcustodial property;

(2)        Register or recordtitle to custodial property if appropriate; and

(3)        Collect, hold,manage, invest, and reinvest custodial property.

(b)        In dealing withcustodial property, a custodian shall observe the standard of care that wouldbe observed by a prudent person dealing with property of another and is notlimited by any other statute restricting investments by fiduciaries.  If acustodian has a special skill or expertise or is named custodian on the basisof representations of a special skill or expertise, the custodian shall usethat skill or expertise.  However, a custodian, in the custodian's discretionand without liability to the minor or the minor's estate, may retain anycustodial property received from a transferor.

(c)        A custodian mayinvest in or pay premiums on life insurance or endowment policies on (i) thelife of the minor only if the minor or the minor's estate or the custodian inthe capacity of custodian is the sole beneficiary, or (ii) the life of anotherperson in whom the minor has an insurable interest only to the extent that theminor, the minor's estate, or the custodian in the capacity of custodian, isthe irrevocable beneficiary.

(d)        A custodian at alltimes shall keep custodial property separate and distinct from all otherproperty in a manner sufficient to identify it clearly as custodial property ofthe minor.  Custodial property may be held with other owners if owned as tenantsin common, provided that the property interest of the owners is fixed. Custodial property subject to recordation is so identified if it is recorded,and custodial property subject to registration is so identified if it is eitherregistered, or held in an account designated, in the name of the custodian,followed in substance by the words:  "as a custodian for ___________ (nameof minor) under the North Carolina Uniform Transfers to Minors Act."

(e)        A custodian shallkeep records of all transactions with respect to custodial property, includinginformation necessary for the preparation of the minor's tax returns, and shallmake them available for inspection at reasonable intervals by a parent or legalrepresentative of the minor, or by the minor if the minor has attained the ageof 14 years. (1987, c. 563, s. 2.)