How to Transfer a Custodial Account

A custodial account, established under either the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA), is a financial account managed by an adult for a minor’s benefit. These accounts hold assets like cash, stocks, and bonds, with the adult acting as custodian until the child reaches a specified age. Transfers may be necessary to move the account to a different financial institution or to transfer assets to the beneficiary upon reaching the age of majority.

Gathering Information and Preparing for Transfer

Preparing for a custodial account transfer requires gathering specific information and documentation. Two primary types of transfers exist: moving an account between financial institutions, and transferring assets directly to the beneficiary upon reaching the age of majority.

Transfers between financial institutions, often called Automated Customer Account Transfer Service (ACATS) or direct transfers, typically involve the receiving institution. Key information needed includes the existing account number, current custodian’s details, and the beneficiary’s full legal name, date of birth, and Social Security Number. The proposed new custodian’s details are also essential for the receiving institution to initiate the transfer.

For an ACATS transfer, the receiving firm often requires a recent account statement from the old firm to verify account information. Specific forms for institution-to-institution transfers are usually provided by the new financial institution, which coordinates with the current custodian. If assets are with a non-ACATS member, such as a credit union, a manual transfer process may be necessary.

Transferring assets directly to the beneficiary occurs when the minor reaches the age of majority, which typically ranges from 18 to 25 years old, depending on the state and custodial account type (UGMA or UTMA). The custodian is responsible for initiating this transfer.

Required documents for transferring to the beneficiary include proof of age, such as a birth certificate or valid government-issued identification. The beneficiary’s Social Security Number and current residential address are also necessary. Financial institutions provide specific forms for this type of transfer, often called a “Custodial Account Transfer of Ownership Form” or a “Transfer/Registration Change Request.” These forms require information about the current account, the custodian, and the new account details for the beneficiary.

All necessary forms can be obtained from the financial institutions involved, either through their websites or customer service. When preparing forms, gather all required data accurately, ensuring names, addresses, and account numbers match existing records to avoid delays. If the beneficiary’s name has changed, a Medallion Signature Guarantee or a certified copy of the legal document may be required. When applicable, consider investment options and fees when deciding on a new financial institution.

Initiating and Completing the Transfer Process

Once information is gathered and forms prepared, initiate the transfer. The process starts by contacting the receiving financial institution for institution-to-institution transfers or the current custodian for transfers to the beneficiary. For transfers between institutions, the receiving firm typically initiates the Automated Customer Account Transfer Service (ACATS) request by submitting a Transfer Initiation Form (TIF) to ACATS, which communicates with the delivering firm.

Submission methods for completed transfer forms and supporting documentation vary by institution, including online portals, mailing physical documents, or in-person submission. For online submissions, instructions for uploading documents and e-signatures will be provided. If mailing, ensure all required signatures, including any Medallion Signature Guarantees if specified for name changes or address discrepancies, are present.

After submission, tracking the transfer status is advisable. Financial institutions provide ways to monitor progress, and both transferring and receiving firms will update you. Follow-up communication is appropriate if unexpected delays or questions arise.

Transfer processing times vary. ACATS transfers usually complete within six business days, though some sources indicate two to three weeks. Manual transfers, if the delivering institution is not an ACATS member, can take longer, potentially several weeks. For transfers to the beneficiary upon reaching the age of majority, some institutions complete the process within five to seven business days after receiving the completed form.

Upon successful transfer completion, the new financial institution typically sends a confirmation that assets have been received and the new account is operational. Verify that all expected positions, cost basis details, and other account information have transferred accurately. For transfers to a beneficiary, the new account will be opened in their name, granting them full control over the assets.