SIE Exam Question 518: Answer and Explanation

Question: 518

A customer calls in asking about how to put money aside for his children. He wants to open a custodial account for his two children, Bobby and Sue. What should you recommend?

• A. Open two accounts for the two children, with him being the custodian on one and his wife being custodian on the other, as one parent may only be custodian for one child.
• B. Open two accounts for both children, with him and his wife as custodian.
• C. Open two accounts, one for each child, with he or his wife as custodians for both or for either.
• D. Open one account immediately for both children.

Correct Answer: C

Explanation:

C: The rule is one custodian and one minor for each UGMA account. There is not a rule regarding who must be custodian.