Many types of NEFCU accounts can be set up as either a Custodial or Trust account relationship.
Custodial accounts are generally set up by adults under a child’s Social Security Number. The custodian manages the funds until the child turns 18, when the account is then turned over to the child. The funds are used for the benefit of the minor, although the custodian has signing authority on the account. Custodial accounts are governed by the Uniform Gifts to Minors Act, and accordingly, there is special paperwork that must be completed upon account opening.
Trust accounts (also known as payable on death (POD) accounts) avoid probate because the asset passes to the beneficiary upon death of the accountholder. The accountholder(s) is(are) the only person(s) who can withdraw funds from the account. The beneficiary(ies) may be changed at any time by the accountholder.