Custodial agreement,
Definition of Custodial agreement:
Arrangement under which a nominee or registered owner holds an asset or property as a custodian on behalf of an actual owner (beneficial owner).
A custodial agreement is an arrangement wherein one holds an asset or property on behalf of the actual owner (beneficial owner). Such agreements are generally entered into by state agencies or companies to administer various benefit programs.
An example of a custodial agreement would be a company retirement plan. Many, if not most, companies hire a third party to administer such plans in order to collect payments from the employer and employees, invest the funds, and disburse the benefits.
How to use Custodial agreement in a sentence?
- These kinds of arrangements give employees the benefit of having an account managed by an investment professional.
- Examples include employee benefit programs such as 401(k) plans or health savings accounts in which a company hires a third party to administer the plan.
- With a custodial agreement, a nominee or registered owner holds assets or property on behalf of the real owner.
Meaning of Custodial agreement & Custodial agreement Definition
