Course: Estate Planning
Lesson 13: Case Study Online
Marvin’s executor had to include the value of the custodial account in Marvin’s gross estate. Was that because Marvin was the donor or the custodian?
Good question; this can be confusing. Property is generally included in a U.S. citizen’s gross estate if they own or control the property. The custodial account must be included in Marvin’s gross estate because he is the custodian and therefore controls the account, not because he is the donor. This is true despite the fact that Marvin cannot legally use custodial account funds for his own purposes. He has a fiduciary duty to use the funds only for the benefit of the beneficiary. However, if Marvin was just the donor of the funds and not the custodian, the value of the custodial account would generally be excluded from Marvin’s gross estate.
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