§ 7-6.12 Care of custodial property

(a) A custodian shall:

(1) take control of custodial property;

(2) register or record title to custodial property if appropriate; and

(3) collect, hold, manage, invest, and reinvest custodial property.

(b) In dealing with custodial property, a custodian shall observe the
standard of care that would be observed by a prudent person dealing with
property of another and is not limited by any other statute restricting
investments by fiduciaries and is specifically authorized to delegate
investment and management functions in the manner of a trustee as
provided in section 11-2.3. If a custodian has a special skill or
expertise or is named custodian on the basis of representations of a
special skill or expertise, the custodian shall use that skill or
expertise. However, a custodian, in the custodian's discretion and
without liability to the minor or the minor's estate, may retain any
custodial property received from a transferor.

(c) A custodian may invest in or pay premiums on life insurance or
endowment policies on (1) the life of the minor only if the minor or the
minor's estate is the sole beneficiary, or (2) the life of another
person in whom the minor has an insurable interest only to the extent
that the minor, the minor's estate, or the custodian in the capacity of
custodian, is the irrevocable beneficiary.

(d) A custodian at all times shall keep custodial property separate
and distinct from all other property in a manner sufficient to identify
it clearly as custodial property of the minor. Custodial property
consisting of certificated securities may be held on deposit at a stock
brokerage firm or a financial institution registered in a street name or
nominee name. Custodial property consisting of an undivided interest is
so identified if the minor's interest is held as a tenant in common and
is fixed. Custodial property subject to recordation is so identified if
it is recorded, and custodial property subject to registration is so
identified if it is either registered, or held in an account designated,
in the name of the custodian, followed in substance by the words: "as a
custodian for_______________(name of minor) under the New York Uniform
Transfers to Minors Act."

(e) A custodian shall keep records of all transactions with respect to
custodial property, including information necessary for the preparation
of the minor's tax returns, and shall make them available for inspection
at reasonable intervals by a parent or legal representative of the minor
or by the minor if the minor has attained the age of fourteen years.