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Custodial Accounts

Under Ohio law, (Revised Code section 2109.04), some executors, most administrators, most guardians, and many trustees are required to post a fiduciary bond. A fiduciary bond is a guarantee by a professional surety (usually an insurance company). If the estate, trust or guardianship suffers loss due to the failure of the fiduciary to fulfill his or her duties, the surety will reimburse the case for the amount of the loss. The amount of the bond must be at least twice the sum of personal property and annual income of the estate, guardianship or trust. Bond premiums are on average $2.50 per thousand dollars of coverage.

An alternative to a bond is to place personal property (cash, bank accounts or securities) in a custodial account with a bank or trust company, pursuant to Ohio Revised section 2109.13. Assets in a custodial account cannot be withdrawn without a specific court order. Any property in a custodial account need not be bonded. If all of the personal property of a guardianship or trust is in a custodial account, not only is a bond generally not needed, but also annual accounts may not need to be filed.