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Title XXVI TRADE AND COMMERCE

Chapter 404

Effective - 28 Aug 2006 bottom

  404.051.  Powers of custodian, limitation — termination of custodianship, when, procedure — degree of care required for custodial property. — 1.  The custodian shall collect, hold, maintain, manage, invest and reinvest the custodial property.  The custodian may accept a transfer of additional property for the same minor into the custodianship and may consolidate into a single custodianship custodial property received for the same minor from multiple transfers or transferors.

  2.  The custodian may deliver, pay over to the minor for expenditure by the minor, or expend for the minor's benefit, so much of the custodial property as the custodian determines advisable for the use and benefit of the minor, without court order and without regard to the duty or ability of the custodian in the custodian's individual capacity or of any other person to support the minor, or any other income or property of the minor.

  3.  Upon the petition of a parent, guardian or conservator of a minor, an adult member of the minor's family, any person interested in the welfare of the minor, or of the minor if the minor has attained the age of fourteen years, the court may order the custodian to expend or to pay over to the minor or the minor's parent, guardian or conservator so much of the custodial property as the court determines advisable for the use and benefit of the minor.

  4.  Any delivery, payment or expenditure pursuant to subsections 2 and 3 of this section is in addition to, not in substitution for, and does not affect, the obligation of any person to support the minor.

  5.  (1)  To the extent that the custodial property has not been expended, the custodian shall deliver the custodial property in an appropriate manner, free of the custodianship, as follows:

  (a)  To the minor on attaining the age of twenty-one years, or on attaining the age of eighteen years for custodial property created by a transfer of property from a person other than a donor and the minor requests the property; or

  (b)  On the minor's death, to the minor's estate.

  (2)  If the custodian does not deliver the custodial property to the minor or the minor's estate as prescribed in subdivision (1) of this subsection, the minor or the minor's personal representative may petition the court to declare the custodianship terminated and to order delivery of the custodial property to the minor or to the minor's estate free of the custodianship.

  (3)  To the extent the custodial property is real property, a conveyance and delivery of the real property by the minor after attaining the age at which the minor is entitled to the property free of the custodianship, or by the minor's heirs, or by the minor's personal representative, shall terminate the custodian's powers, duties and rights with respect to the real property.

  (4)  If the minor is an incapacitated person at the time the minor would otherwise be entitled to receive the custodial property free of the custodianship, the custodian shall deliver the custodial property to the incapacitated person's conservator.  If the incapacitated person has no conservator, the custodian may transfer the custodial property to any adult person or financial institution, including the custodian, as personal custodian for the incapacitated person under any law providing for custodianship of property for incapacitated adult persons.

  6.  The custodian is under a duty to act in the interest of the minor and to avoid conflicts of interest that impair the custodian's ability to so act.  In dealing with the custodial property, the custodian shall observe the degree of care that would be observed by a prudent person dealing with the property and conducting the affairs of another, except that all investments made on or after August 28, 1998, shall be in accordance with the provisions of the Missouri prudent investor act, sections 469.900 to 469.913.  The custodian is not limited by any other statute restricting investments or expenditures by fiduciaries.  If the custodian has special skills or is named custodian on the basis of representations of special skills or expertise, the custodian is under a duty to use those skills.  The custodian, in the custodian's discretion and without liability to the minor or the minor's estate, may retain any custodial property received under sections 404.005 to 404.094, and may hold money or securities in the financial institution or brokerage company to which the property was delivered by the transferor.

  7.  The custodian may invest in and pay premiums out of custodial property for life or endowment insurance policies on the life of the minor or the life of another person in whom the minor has an insurable interest, provided the insurance proceeds will be distributed on the death of the insured life to the minor, the minor's estate or the custodian in the custodian's representative capacity.

  8.  Subject to the degree of care prescribed in subsection 6 of this section, the custodian, acting in the capacity of custodian for the benefit of the minor, has all rights, power and authority over the custodial property that unmarried, nonincapacitated adult owners have over their own property, except the power to make a gift of the minor's property unless the gift to be made is approved by a court.

  9.  The custodian at all times shall keep custodial property separate and distinct from all other property in a manner to identify it clearly as custodial property of the minor.  Custodial property consisting of an undivided interest in property is sufficiently separate and distinct if the custodian's interest in the property is held as a tenant in common with the other owners of the property and the minor's proportional interest in the property is fixed.  Custodial property is sufficiently so identified if it is held in the name of the custodian in the manner prescribed in section 404.707.

  10.  The custodian may establish checking, savings or other similar accounts with financial institutions and brokers whereby both the custodian and the minor may withdraw money from the account or draw checks against the account.  Money withdrawn from an account or checks written against an account by the minor shall be treated as a delivery of custodial property from the custodian to the minor.

  11.  Subject to the degree of care prescribed in subsection 6 of this section, the custodian, acting in the capacity of custodian and for the benefit of the minor, may borrow money, lend money, acquire by lease the use of property for the minor, lease custodial property and enter into contracts under which the performance required by such agreements may extend beyond the date the custodianship terminates.  The custodian shall hold property that is borrowed or leased for the minor as custodial property in the name of the custodian in the manner prescribed in section 404.047.

  12.  The custodian shall keep records of all transactions with respect to the custodial property, including information necessary for preparation of the minor's tax returns, and make them available for inspection at reasonable intervals by a parent, the minor if the minor has attained the age of fourteen years, an adult member of the minor's family if the minor has no living parent, and a legal representative of the minor.

  13.  The minor's custodian may comply with an agreement with a transferor of property to the minor, including an agreement respecting investment objectives, expenses, compensation, resignation and naming of successor custodians, to the extent that such agreement does not conflict with the custodian's obligations to the minor under sections 404.005 to 404.094.

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(L. 1985 S.B. 35, et al. § 5, A.L. 1989 H.B. 145, A.L. 1993 S.B. 277, A.L. 1998 H.B. 1571, A.L. 2006 S.B. 892)


---- end of effective   28 Aug 2006 ----

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