KRS 385.122: Care of custodial property.

(1) A custodian shall:

(a) Take control of custodial property;

(b) Register or record title to custodial property if appropriate; and

(c) Collect, hold, manage, invest, and reinvest custodial property.

(2) 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. If a custodian

has a special skill or expertise or is named custodian on the basis of represe ntations

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.

(3) A custodian may invest in or pay premiums on life insurance or endowment policies

on:

(a) The life of the minor only if the minor or the minor's estate is the sole

beneficiary; or

(b) 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.

(4) A custodian at all times shall keep custodial property separate and distinct from all

other property in a ma nner sufficient to identify it clearly as custodial property of

the minor. 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 Kentucky Uniform Transfers to

Minors Act."

(5) 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 (14) years.