Almost everything a client tells me about custodial accounts came from a brochure. The brochure says the transferor picks a termination age, that the custodian has broad discretion, and that the account is a flexible college-savings vehicle. In Minnesota the first of those is flatly false, the second was narrowed by statute in 2020, and the third depends on a distinction the brochure never mentions.
Two facts drive everything else in Chapter 527, the Minnesota Uniform Transfers to Minors Act.
You cannot pick the age. Minnesota’s version of the act contains no election. There is no line on the form where a transferor chooses 18, or 21, or 25, because Minn. Stat. § 527.40, subd. 1, supplies a single answer for every transfer the act recognizes.
And a large population of existing Minnesota accounts still terminates at 18 — the dividing line being a date in the spring of 2020 that, in my experience, nobody calendared.
Twenty-one, for anything funded today
Section 527.40, subd. 1, is one sentence and a two-item list:
The custodian shall transfer in an appropriate manner the custodial property to the minor or to the minor’s estate upon the earlier of the following terminating events:
(1) the minor’s attainment of 21 years of age with respect to custodial property transferred under section 527.24, 527.25, 527.26, or 527.27; or
(2) the minor’s death.
The four cross-referenced sections are the four — and only four — that authorize a transfer creating custodial property under the act:
- § 527.24 — a transfer by irrevocable gift, or by irrevocable exercise of a power of appointment. This is the ordinary case: a parent or grandparent funding an account.
- § 527.25 — a transfer by a personal representative or trustee authorized by the governing will or trust.
- § 527.26 — a transfer by a personal representative, trustee, or conservator where the instrument does not authorize it, or where there is no will.
- § 527.27 — a transfer by an “obligor”: someone who holds property of, or owes a liquidated debt to, a minor who has no conservator.
Clause (1) names all four. There is no residual category and no transferor election. Every Minnesota custodianship created today runs to 21.
Why do some Minnesota accounts still end at 18?
Because until May 17, 2020, two of those four categories terminated at 18, and the legislature made the change prospective only.
Section 527.42 carries the headnote Effect on Existing Custodianships, which reads like housekeeping. It is not. Its entire operative text today:
Section 527.40, subdivision 1, does not apply to custodial property transferred under section 527.26 or 527.27 before May 17, 2020. For custodial property transferred under section 527.26 or 527.27 before May 17, 2020, the custodian shall transfer in an appropriate manner the custodial property to the minor or to the minor’s estate upon the earlier of the following terminating events: (1) the minor’s attainment of 18 years of age or (2) the minor’s death.
The session law shows exactly what happened. In 2020 Minn. Laws ch. 86, art. 2, § 3, the legislature struck the clause that had read “the minor’s attainment of age 18 with respect to custodial property transferred under section 527.26 or 527.27” and folded §§ 527.26 and 527.27 into the 21-year clause. Section 4 of the same article rewrote § 527.42 to grandfather everything already funded under those two sections, and carried the only effective-date clause in the article: “This section is effective the day following final enactment.” The Revisor has since compiled that date into the statute as May 17, 2020. Sections 1 through 3 of article 2 carried no effective-date clause and therefore took effect on the August 1 default in Minn. Stat. § 645.02.
I do not read that ten-week gap as a live ambiguity. It is a session-law sequencing artifact: §§ 3 and 4 were enacted together in the same article of the same act, § 527.42 was drafted to refer to the amended § 527.40, and the Revisor’s compiled text — the only version a custodian, a court, or an examining attorney actually consults — applies the May 17, 2020 line to every § 527.26 or 527.27 transfer made on or after that date, whatever the later date on which § 527.40 itself was formally amended.
The practical consequence is a vintage split that will persist for another decade and a half:
| How the account was funded | Funded before May 17, 2020 | Funded on or after May 17, 2020 |
|---|---|---|
| Gift from a parent, grandparent, or anyone else (§ 527.24) | 21 | 21 |
| Transfer authorized by a will or trust (§ 527.25) | 21 | 21 |
| Transfer by a personal representative, trustee, or conservator without instrument authority (§ 527.26) | 18 | 21 |
| Transfer by an obligor — an insurer, a payor, a debtor (§ 527.27) | 18 | 21 |
Two kinds of account sit on the 18-year side of the line more often than any other. One is a settlement or benefit payment routed to a custodian by the paying party rather than through a conservatorship — a § 527.27 obligor transfer. The other is a distribution made by a personal representative or trustee out of an estate or trust whose instrument said nothing about custodianships — a § 527.26 transfer. A grandparent’s gift account was never on the 18-year side; it has run to 21 since the act was adopted as 1985 Minn. Laws ch. 221.
So when a custodian calls me, my first question is not how old the beneficiary is. It is which section funded this account, and on what date. A custodian holding a pre-2020 obligor transfer past the beneficiary’s eighteenth birthday is holding property the statute says should already have been delivered.
An 18-year-old is not an adult here. Neither is a 20-year-old.
Chapter 527 defines its own vocabulary, and it does so aggressively. Section 527.21 provides:
(1) “Adult” means an individual who has attained the age of 21 years, notwithstanding any law to the contrary.
…
(11) “Minor” means an individual who has not attained the age of 21 years, notwithstanding any law to the contrary.
Minnesota’s general definitions run the other way. Minn. Stat. § 645.451, subd. 3, defines “adult” as “an individual 18 years of age or older,” and subd. 2 defines “minor” as “an individual under the age of 18.” That “notwithstanding any law to the contrary” language exists to override them.
It matters because § 527.29, paragraph (a), permits a transfer only to the transferor, “an adult other than the transferor,” or a trust company. A 19-year-old older sibling is an adult in Minnesota for every other purpose on earth and is not an adult for this one. The same definition governs who may be nominated under § 527.23, who may take under §§ 527.26 and 527.27, and who may be designated a successor under § 527.38.
Section 527.31, paragraph (a), softens the blow: the validity of a transfer “is not affected by … designation of an ineligible custodian,” with one exception — designating the transferor where the transferor is not eligible to serve as custodian for that kind of property. Naming a 20-year-old does not void the gift. It creates an account with a custodian the statute never authorized, which becomes the financial institution’s problem and eventually somebody’s cleanup project.
The property belongs to the child from the moment of transfer
This is the provision that makes UTMA both simple and dangerous. Section 527.31, paragraph (b):
A transfer made pursuant to section 527.29 is irrevocable, and the custodial property is indefeasibly vested in the minor, but the custodian has all the rights, powers, duties, and authority provided in this chapter, and neither the minor nor the minor’s legal representative has any right, power, duty, or authority with respect to the custodial property except as provided in this chapter.
I read that as three separate rules.
Irrevocable. There is no undo. A parent who funds a custodial account and later needs the money — for a bankruptcy, a business, another child’s tuition — cannot take it back. The custodian may spend it for the minor’s benefit under § 527.34, but “expend for the minor’s benefit” is not a euphemism for back to the parent.
Indefeasibly vested in the minor. The child owns it. That is why the account carries the child’s Social Security number, why the income is the child’s income, and why the account is the student’s asset rather than the parent’s in a federal need analysis. Compare 20 U.S.C. § 1087vv(f)(3), which provides that a “qualified education benefit” — defined in § 1087vv(f)(4) as a § 529 qualified tuition program, a state prepaid tuition plan, or a Coverdell account — “shall be considered an asset of … the parent if the student is a dependent student and the account is designated for the student, regardless of whether the owner of the account is the student or the parent.” A UTMA custodianship is not on that list. It is an ordinary asset under § 1087vv(f)(1), owned by the person in whom it is indefeasibly vested.
The minor has no authority over it. Until termination, the child cannot direct the account, and neither can the child’s guardian or conservator, except through the specific petitions Chapter 527 allows.
There is no spendthrift clause anywhere in Chapter 527. The property is the child’s, exposed to the child’s own creditors and to whatever the child’s circumstances become at 21. If a beneficiary has, or may develop, a disability that makes outright ownership harmful, a custodial account is the wrong container — see why a Minnesota supplemental needs trust has to exist before the money arrives.
The investing standard changed in 2020, and most custodians never heard
Before 2020, § 527.32, paragraph (b), told a custodian to “observe the standard of care that would be observed by a prudent person dealing with property of another.” That was a rule about individual assets. The 2020 amendment replaced it:
In dealing with custodial property, a custodian shall comply with the prudent investor rule set forth in section 501C.0901 as if such custodial property were trust property. However, a custodian, in the custodian’s discretion and without liability to the minor or the minor’s estate, may retain any custodial property received from a transferor.
Section 501C.0901, subd. 2, is a portfolio standard: investment decisions “must be evaluated not in isolation but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.” A Minnesota custodian is now measured against a diversified-portfolio benchmark, not an asset-by-asset one.
That second sentence is the safe harbor, and it is narrower than custodians assume. It protects retention of what the transferor handed over — the concentrated block of employer stock a grandparent transferred, held as received. It does nothing for a concentrated position the custodian assembled.
The rest of § 527.32 is administrative and thoroughly enforceable. Paragraph (a) requires the custodian to take control, register or record title, and manage the property. Paragraph (d) requires custodial property to be kept “separate and distinct from all other property” and identified by the statutory designation. Paragraph (e) requires records “including information necessary for the preparation of the minor’s tax returns,” available for inspection “at reasonable intervals by a parent or legal representative of the minor or by the minor if the minor has attained the age of 14 years.”
Fourteen recurs throughout this chapter, and I would put it on any custodian’s calendar. At 14 the beneficiary can inspect records (§ 527.32(e)), petition the court to compel a distribution (§ 527.34(b)), receive notice of the custodian’s resignation (§ 527.38(c)), designate a successor custodian in some circumstances (§ 527.38(d)), petition to remove the custodian for cause or require a bond (§ 527.38(f)), and petition for an accounting (§ 527.39(a)).
What can the custodian actually spend the money on?
Section 527.34, paragraph (a), is deliberately broad:
A custodian may deliver or pay to the minor or expend for the minor’s benefit so much of the custodial property as the custodian considers advisable for the use and benefit of the minor, without court order and without regard to (i) the duty or ability of the custodian personally or of any other person to support the minor, or (ii) any other income or property of the minor which may be applicable or available for that purpose.
Two guardrails sit around it. Paragraph (c) provides that a delivery, payment, or expenditure “is in addition to, not in substitution for, and does not affect any obligation of a person to support the minor” — so a custodial account is not a source of child support, and paying school costs out of it offsets no support obligation. Paragraph (b) lets an interested person, or the beneficiary once 14, petition the court to order a distribution the custodian has refused to make.
The compensation rule is the one that catches parents. Section 527.35, paragraph (b): “Except for one who is a transferor under section 527.24, a custodian has a noncumulative election during each calendar year to charge reasonable compensation for services performed during that year.” The donor who funded the account by gift and then serves as custodian gets no fee. A custodian who did not fund it may take reasonable annual compensation, and the election does not carry forward. Reimbursement of reasonable expenses is a separate matter, available to everyone under paragraph (a), and under paragraph (c) no bond is required unless the court orders one under § 527.38, paragraph (f).
Section 527.30 disposes of several structuring ideas clients bring me, in three lines:
A transfer may be made only for one minor, and only one person may be the custodian. All custodial property held under this chapter by the same custodian for the benefit of the same minor constitutes a single custodianship.
No joint custodians. No single account for two siblings. And every transfer by the same custodian for the same child merges into one custodianship no matter how many accounts a brokerage opens — which is exactly what matters when that custodian is asked to render an accounting under § 527.39.
The custodian will not hand it over at 21. What now?
The 2020 amendment added a self-help remedy that did not previously exist. Section 527.40, subd. 2, paragraph (a):
Upon the date of the applicable terminating event pursuant to subdivision 1, if (1) there is no custodian then serving or (2) no court proceeding is pending and the custodian fails to transfer the custodial property to the minor or the minor’s estate within 90 days of that date, then the minor or the minor’s personal representative may execute an affidavit setting forth the date of the terminating event and facts that show that the terminating event has occurred. The person in possession of the custodial property must transfer to the minor or the minor’s personal representative the custodial property when presented with the executed affidavit and a certified copy of the minor’s birth certificate or, in the case of a deceased minor, a certified copy of the minor’s death certificate.
Paragraph (b) makes the affidavit and documentation “conclusive proof for any party relying on the affidavit,” and immunizes the holder: a person in possession who transfers on the affidavit “shall not be liable to any person for the transfer.”
That is a genuinely useful tool, and it works only against the holder of the property — the brokerage, the bank, the title company. It does nothing about the harder case, where the custodian has already moved or spent the money. There, the remedies are the accounting petition under § 527.39, paragraph (a) — available to the beneficiary at 14, the beneficiary’s guardian or legal representative, an adult member of the minor’s family, or the transferor — and removal for cause under § 527.38, paragraph (f), which may also require the custodian to give bond. Section 527.39, paragraph (d), requires the court to order an accounting and delivery whenever it removes a custodian.
Read the affidavit trigger carefully, because the statute states two separate triggers rather than one combined test. The affidavit is available immediately if there is no custodian then serving, or — if a custodian is still serving — only once 90 days have run from the terminating event with no court proceeding pending. A beneficiary who has already filed a removal petition against a serving custodian has taken the affidavit off the table on both counts: the custodian is still in office, and a proceeding is now pending. Sequence those two remedies; do not fire both.
Successor custodians and the 60-day trap
Section 527.38 governs what happens when a custodian declines, resigns, dies, becomes incapacitated, or is removed. Paragraph (b) lets a serving custodian designate a successor — a trust company or an adult other than a § 527.24 transferor — “by executing and dating an instrument of designation before a subscribing witness other than the successor,” effective when the custodian resigns, dies, becomes incapacitated, or is removed.
If nobody did that, paragraph (d) supplies a default sequence. A beneficiary who has reached 14 may designate an adult family member, a conservator, or a trust company. “If the minor has not attained the age of 14 years or fails to act within 60 days after the ineligibility, death, or incapacity, the conservator of the minor becomes successor custodian.” And if there is no conservator, or the conservator declines, an interested person petitions the court.
Sixty days is easy to miss and the consequence is expensive: blowing it converts a custodianship designed to stay out of court into one that needs a conservatorship proceeding to staff.
Custodial real estate: the affidavit that clears title
Chapter 527 permits real property to be held in custodianship — § 527.29, paragraph (a), clause (5), creates custodial property when an interest in real property is recorded in the custodial designation. Selling it is the problem, because a title examiner cannot see from the record whether the custodian is still serving or the custodianship has already terminated.
Section 527.405 solves it. Subdivision 1 requires the custodian to furnish the grantee an affidavit attesting that the custodian has not resigned or been removed and that the custodianship has not terminated (or, if it has, that the conveyance is to the minor or the minor’s personal representative). Subdivision 2 supplies the statutory form. Subdivision 3 makes the affidavit “conclusive proof” of both facts, with one exception: it is “not conclusive as to a party dealing directly with the custodian who has actual knowledge” that the custodian resigned, was removed, or that the custodianship terminated and the conveyance is not to the beneficiary.
That is a 2002 addition (2002 Minn. Laws ch. 403, § 5), and it is the only reason a Minnesota closing on custodial real estate is possible at all.
Choosing between UTMA, a 529 plan, a minor’s trust, and a conservatorship
| UTMA custodianship (ch. 527) | § 529 qualified tuition program | § 2503(c) minor’s trust | Conservatorship (ch. 524, art. 5) | |
|---|---|---|---|---|
| Who owns the property | The minor, indefeasibly, from transfer — § 527.31(b) | Governed by the program; the beneficiary may be changed — 26 U.S.C. § 529(c)(5)(B) | The trust, for the minor’s benefit | The minor; the conservator manages |
| Reversible by the funder | No — § 527.31(b) | Beneficiary may be changed, subject to gift/GST rules — § 529(c)(5)(B) | No, if drafted to qualify | n.a. |
| When the beneficiary takes control | 21 (18 for pre-5/17/2020 § 527.26/.27 transfers) — §§ 527.40, subd. 1; 527.42 | On qualified distributions; not an ownership event | At 21 — 26 U.S.C. § 2503(c)(2)(A) | On majority or termination of the conservatorship |
| Court involvement to create | None | None | None | Petition, hearing, appointment |
| Ongoing court supervision | None unless someone petitions — §§ 527.34(b), 527.38(f), 527.39 | None | Per the instrument | Yes — inventory, annual accounts |
| Custodian/trustee fee | Reasonable annual election, but not for a § 527.24 donor — § 527.35(b) | Program fees | Per the instrument | Court-approved |
| Treated as whose asset in federal need analysis | The student’s — not a “qualified education benefit” under 20 U.S.C. § 1087vv(f)(4) | The parent’s, if the student is a dependent student — 20 U.S.C. § 1087vv(f)(3) | Depends on drafting | The minor’s |
Chapter 527 builds exactly one bridge between the UTMA column and the § 2503(c) trust column. Section 527.33, paragraph (c):
At any time, with or without a court order, a custodian may transfer all or part of the custodial property to a trust, including a trust created by a custodian, that satisfies the requirements of section 2503(c) of the Internal Revenue Code and the regulations implementing that section. A transfer to a trust pursuant to this paragraph terminates the custodianship to the extent of the transfer.
That power is real and badly underused — a custodian holding an account for a beneficiary approaching 21 can move it into a trust structure without going to court. It is not an age extension. Section 2503(c)(2)(A) requires that the property, to the extent not expended, “pass to the donee on his attaining the age of 21 years.” A trust satisfying § 2503(c) carries the same terminal age the custodianship did. If the goal is keeping property in trust past 21, the answer is a trust funded on different terms from the beginning, not a conversion at the end.
Three dollar figures, three different jobs
$10,000, § 527.26. A personal representative, trustee, or conservator making a transfer not authorized by the governing instrument may do so only if three conditions are met, the third being that “the transfer is authorized by the court if it exceeds $10,000 in value.” Above $10,000, the fiduciary needs an order.
$10,000, § 527.27. An obligor transfer where no custodian was nominated under § 527.23 “may be made to an adult member of the minor’s family or to a trust company unless the property exceeds $10,000 in value.” That is not a court-authorization threshold. It is a ceiling. Above $10,000 with no nomination, the route is closed and the payor needs another mechanism.
The federal annual exclusion, § 524.5-104. Outside Chapter 527 entirely, the probate code’s facility-of-transfer provision lets a person transfer money or personal property to a minor “as to an amount or value not exceeding the amount allowable as a tax exclusion gift under section 2503(b) of the Internal Revenue Code or a different amount that is approved by the court,” and a UTMA custodian is one of the five permitted recipients. Section 2503(b)(2) indexes the exclusion for inflation, so this ceiling floats — look it up in the year of the transfer rather than memorizing a number. Section 524.5-104, paragraph (b), turns the provision off if the transferor knows a conservator has been appointed or a petition is pending.
None of these displaces the separate rule that a parent cannot settle a child’s injury claim without judicial approval; see why only a judge can approve a Minnesota minor’s settlement.
Taxes: the kiddie tax does not stop at 18
Because the property is indefeasibly vested in the minor under § 527.31(b), the income is the minor’s income, and § 527.32(e) obligates the custodian to keep the records needed to prepare the minor’s returns.
Two federal provisions structure the rest. Section 2503(c) of the Internal Revenue Code is the reason the terminal age is 21 at all: a gift to someone under 21 is not a gift of a future interest — and therefore qualifies for the annual exclusion — only if the property “may be expended by, or for the benefit of, the donee before his attaining the age of 21 years” and, to the extent not expended, will “pass to the donee on his attaining the age of 21 years.” Chapter 527 is built to that specification.
Section 1(g) is the reason the tax bill blindsides families. The kiddie tax taxes a child’s net unearned income by reference to the parents’ rate, and § 1(g)(2)(A) does not stop at 18: it reaches a child who “has not attained age 18 before the close of the taxable year,” and also a child who has attained 18, meets the age requirements of § 152(c)(3), and “whose earned income … for such taxable year does not exceed one-half of the amount of the individual’s support … for such taxable year.” A college student supported by parents can sit inside § 1(g) for the entire remaining life of a custodial account.
What I tell people to do
If you are considering funding one. Decide first whether outright ownership at 21 is an acceptable outcome for this particular child, because that is the only outcome Chapter 527 offers. If it is not — a disability, a creditor problem, a divorce, or simply an amount large enough that 21 is the wrong age — the right instrument is a trust drafted on different terms, not a custodianship you hope to unwind later. If you do fund one, use the statutory designation language from § 527.29, name a custodian who is at least 21, and remember that a donor-custodian cannot charge a fee.
If you are serving as custodian. Find out which section funded the account and on what date; that single fact decides whether the beneficiary’s rights vested at 18 or vest at 21. Keep the property separate and correctly designated (§ 527.32(d)), keep the records (§ 527.32(e)), and evaluate the portfolio against § 501C.0901 rather than asset by asset. Take the retention safe harbor for exactly what it is: protection for holding what you received, not for what you built.
If you are the beneficiary and the money has not arrived. Confirm the terminating event and the date, then count 90 days. After that, § 527.40, subd. 2, hands you an affidavit remedy against whoever holds the property, backed by a statutory immunity that makes it comfortable for a bank or brokerage to comply. If the property is gone rather than merely withheld, the petition you want is the accounting under § 527.39 — and you have had that right since you were 14, not since 21.
If you are a fiduciary making the transfer. Check § 527.23 first for a nomination; if there is one, § 527.25, paragraph (b), and § 527.27, paragraph (b), make the transfer to that person mandatory. Then check the $10,000 lines. And if you are transferring under § 527.26 or § 527.27, know that you are creating a 21-year account today and that any predecessor account created before May 17, 2020 was not.
Madgett Law, LLC
I handle Minnesota estate and probate matters, including custodial accounts under Chapter 527, minor’s trusts, guardianship and conservatorship proceedings, and the fights that break out when a custodian will not account or will not deliver at termination. I also work the front end — structuring how money reaches a child in the first place, so nobody has to litigate it later. If you are a custodian trying to pin down your obligations, or a young adult whose custodial account has never been transferred, call 612-470-6529 or send us a message. Madgett Law, LLC.
Related: naming a guardian for your minor children · guardianship and conservatorship in Minnesota · supplemental needs trusts · POD and joint accounts · court approval of a minor’s settlement
Sources: Minn. Stat. § 527.21(1) and (11) (“adult” is 21 and “minor” is under 21 for Chapter 527, “notwithstanding any law to the contrary”), (6) (definition of custodial property), (7) (custodian), (10) (member of the minor’s family); § 527.22, paragraph (a) (scope and the residency/situs trigger), paragraph (c) (transfers valid under another state’s act are governed by that state’s law); § 527.23, paragraph (a) (revocable nomination and the statutory designation language), paragraph (b) (nominee must be eligible under § 527.29(a)), paragraph (c) (no custodial property until the nominating instrument becomes irrevocable); § 527.24 (transfer by irrevocable gift or exercise of a power of appointment); § 527.25, paragraphs (a)–(c) (transfer authorized by will or trust; mandatory transfer to a nominated custodian); § 527.26, paragraphs (a)–(b) (fiduciary transfer without instrument authority), paragraph (c)(iii) (court authorization required above $10,000); § 527.27, paragraph (a) (obligor transfer), paragraph (b) (mandatory transfer to a nominated custodian), paragraph (c) ($10,000 ceiling where no custodian was nominated); § 527.29, paragraph (a), clauses (1)–(7) (the seven ways custodial property is created; permitted custodians; designation language), clause (5) (real property), paragraph (b) (statutory transfer form), paragraph (c) (transferor must place the custodian in control as soon as practicable); § 527.30 (one minor, one custodian, single custodianship); § 527.31, paragraph (a)(2) (designation of an ineligible custodian does not affect validity, with the transferor exception), paragraph (b) (transfer is irrevocable and property is indefeasibly vested in the minor); § 527.32, paragraph (a) (duties to take control, register, and manage), paragraph (b) (prudent investor rule of § 501C.0901; retention safe harbor for property received from a transferor), paragraph (d) (separate and distinct; designation language), paragraph (e) (records; inspection by a parent, legal representative, or the minor at 14); § 527.33, paragraph (a) (powers of an unmarried adult owner, exercisable in the custodial capacity only), paragraph (c) (transfer to an I.R.C. § 2503(c) trust with or without court order; terminates the custodianship to the extent of the transfer); § 527.34, paragraph (a) (expenditure for the minor’s use and benefit without court order and without regard to support duty or other resources), paragraph (b) (petition by an interested person or the minor at 14), paragraph (c) (in addition to, not in substitution for, support obligations); § 527.35, paragraph (a) (reimbursement of reasonable expenses), paragraph (b) (noncumulative annual compensation election, unavailable to a § 527.24 transferor), paragraph (c) (no bond except under § 527.38(f)); § 527.36 (third-person protection); § 527.37, paragraphs (a)–(c) (claims against custodial property; custodian and minor personal liability limited to personal fault); § 527.38, paragraph (b) (designation of successor before a subscribing witness), paragraph (c) (resignation; notice to a minor 14 or older), paragraph (d) (successor designation by a minor 14 or older; 60-day default to the conservator; petition to the court), paragraph (f) (removal for cause and bond, on petition of a transferor, legal representative, adult family member, guardian, conservator, or the minor at 14); § 527.39, paragraph (a) (accounting petition; who may bring it), paragraph (d) (accounting on removal); § 527.40, subd. 1, clauses (1)–(2) (termination at 21 for property transferred under §§ 527.24, 527.25, 527.26, or 527.27, or on the minor’s death), subd. 2, paragraphs (a)–(b) (90 days; affidavit and certified birth or death certificate; conclusive proof; immunity of the transferring holder); § 527.405, subds. 1–3 (custodian’s affidavit for a real property conveyance; statutory form; conclusive proof and the actual-knowledge exception); § 527.42 (custodial property transferred under § 527.26 or § 527.27 before May 17, 2020 terminates at 18); § 527.44 (short title); § 501C.0901, subd. 2, paragraphs (a)–(b) (prudent investor standard; portfolio evaluation); § 524.5-104, paragraph (a) (facility of transfer capped at the I.R.C. § 2503(b) exclusion or a court-approved amount; UTMA custodian as a permitted recipient), paragraph (b) (inapplicable where a conservator is appointed or a petition is pending); § 645.02 (August 1 default effective date); § 645.451, subds. 2–3 (general Minnesota definitions of minor and adult at 18) — all from the Minnesota Office of the Revisor of Statutes, 2025 Minnesota Statutes, retrieved August 23, 2026. Session law: 1985 Minn. Laws ch. 221 (original enactment of Chapter 527; confirmed from the “History:” lines of the individual sections cited above); 2020 Minn. Laws ch. 86, art. 2, § 1 (replacing the prudent-person standard in § 527.32(b) with the § 501C.0901 prudent investor rule), § 3 (striking the age-18 clause for §§ 527.26 and 527.27 transfers and adding § 527.40, subd. 2), § 4 (rewriting § 527.42; “This section is effective the day following final enactment”), and the article 2 effective-date structure; 2002 Minn. Laws ch. 403, § 5 (enacting § 527.405). Federal: 26 U.S.C. § 2503(b)(1)–(2) (annual exclusion and inflation adjustment), § 2503(c)(1), (2)(A) (present-interest treatment for transfers to a person under 21; property must pass at 21); 26 U.S.C. § 529(b)(1), (c)(5)(B) (qualified tuition program; change of designated beneficiary); 26 U.S.C. § 1(g)(1), (2)(A)–(C), (4) (kiddie tax; children 18 and older who meet the § 152(c)(3) age requirements and whose earned income does not exceed one-half of their support); 20 U.S.C. § 1087vv(f)(1) (definition of assets), (f)(3) (qualified education benefit treated as the parent’s asset for a dependent student), (f)(4) (definition of qualified education benefit) — all from the Office of the Law Revision Counsel, uscode.house.gov, retrieved August 23, 2026. No published Minnesota appellate decision construing Chapter 527 was located in the archives available for this article; every proposition above is stated from statutory text.
This article is general legal information about Minnesota law. It is not legal advice, it does not create an attorney–client relationship, and no outcome is promised or implied. Custodial account questions turn on the specific funding section, the funding date, and the terms of the instrument that created the transfer.