Custodial Account Definition

A custodial account is any account that is created to benefit one person, but that is managed by another person. The managing person is called the custodian. Custodial accounts are fairly common-for example, you might have a retirement account that is actually managed by someone else. Another common reason for a custodial account is when a minor has considerable wealth intended for their benefit; the account will be managed by a custodian until the account owner turns 21 (or 18, depending upon the jurisdiction).