Vt. Stat. Ann. tit. 14, § 3213
Nomination of custodian
Redline — July 1, 2021 → current.View current text →
Current — June 1, 2022
As of July 1, 2021
(1) A person having the right to designate the recipient of property transferable upon the occurrence of a future event may revocably nominate a custodian to receive the property for a minor beneficiary upon the occurrence of the event by naming the custodian, followed in substance by the words: “as custodian for ________ (name of minor) under the Vermont Uniform Transfers to Minors Act.” The nomination may name one or more persons as substitute custodians to whom the property must be transferred, in the order named, if the first nominated custodian dies before the transfer or is unable, declines, or is ineligible to serve. The nomination may be made in a will, a trust, a deed, an instrument exercising a power of appointment, or in a writing designating a beneficiary of contractual rights that is registered with or delivered to the payor, issuer, or other obligor of the contractual rights.
(1) A person having the right to designate the recipient of property transferable upon the occurrence of a future event may revocably nominate a custodian to receive the property for a minor beneficiary upon the occurrence of the event by naming the custodian, followed in substance by the words: “as custodian for _______________ (name of minor) under the Vermont Uniform Transfers to Minors Act.” The nomination may name one or more persons as substitute custodians to whom the property must be transferred, in the order named, if the first nominated custodian dies before the transfer or is unable, declines, or is ineligible to serve. The nomination may be made in a will, a trust, a deed, an instrument exercising a power of appointment, or in a writing designating a beneficiary of contractual rights that is registered with or delivered to the payor, issuer, or other obligor of the contractual rights.
(2) A custodian nominated under this section must be a person to whom a transfer of property of that kind may be made under subsection 3219(a) of this title.
(2) A custodian nominated under this section must be a person to whom a transfer of property of that kind may be made under subsection 3219(a) of this title.
(3) The nomination of a custodian under this section does not create custodial property until the nominating instrument becomes irrevocable or a transfer to the nominated custodian is completed under section 3219 of this title. Unless the nomination of a custodian has been revoked, upon the occurrence of the future event, the custodianship becomes effective, and the custodian shall enforce a transfer of the custodial property pursuant to section 3219 of this title. Added 2015, No. 7, § 1.
(3) The nomination of a custodian under this section does not create custodial property until the nominating instrument becomes irrevocable or a transfer to the nominated custodian is completed under section 3219 of this title. Unless the nomination of a custodian has been revoked, upon the occurrence of the future event, the custodianship becomes effective, and the custodian shall enforce a transfer of the custodial property pursuant to section 3219 of this title.
OFFICIAL COMMENT
This section is new and permits a future custodian for a minor to be nominated to receive a distribution under a will or trust, or as a beneficiary of a power of appointment, or of contractual rights such as a life or endowment insurance policy, annuity contract, P.O.D. Account, benefit plan, or similar future payment right. Nomination of a future custodian does not constitute a "transfer" under this Act and does not create custodial property. If it did, the nomination and beneficiary designation would have to be permanent, since a "transfee" is irrevocable and indefeasibly vests ownership of the interest in the minor under section 3221(b) of this chapter.
Instead, this section permits a revocable beneficiary designation that takes effect only when the donor dies, or when a lifetime transfer to the custodian for the minor beneficiary occurs, such as a distribution under an inter vivos trust. However, an unrevoked nomination under this section is binding on a personal representative or trustee (see section 3215(b) of this chapter) and on insurance companies and other obligors who contract to pay in the future (see section 3217(b)).
The person making the nomination may name contingent or successive future custodians to serve, in the order named, in the event that the person first nominated dies, or is unable, declines, or is ineligible to serve. Such a substitute future custodian is a custodian "nominated... under Section 3213" to whom the transfer must be made under sections 3215(b) and 3217(b) of this chapter.
Any person nominated as future custodian may decline to serve before the transfer occurs and may resign at any time after the transfer. See section 3228 of this chapter.
Official source: Vermont General Assembly. Reproduced from public-domain Vermont statutes; confirm against the official source for the current text. Not legal advice.