Does a custodial agency have fiduciary capacity?

Does a custodial agency have fiduciary capacity?

• A. Yes
• B. Sometimes
• C. Not applicable
• D. No

Answer: (D)

Fiduciary capacity means you have the duty to act for someone else’s benefit with loyalty and care, and you have discretion over assets or decisions that affect them. A custodial agency is mainly responsible for safekeeping and handling assets or records on behalf of someone else, typically following explicit instructions rather than making independent, benefit-focused decisions. Because fiduciary duties arise from that kind of discretionary, loyalty-based relationship, a custodial agency does not automatically carry fiduciary capacity. Therefore, the statement that fits best is that it does not have fiduciary capacity. If a custodial role were given broad discretionary power to manage assets, it could become fiduciary, but in the ordinary custodial arrangement it is not.

Fiduciary capacity means you have the duty to act for someone else’s benefit with loyalty and care, and you have discretion over assets or decisions that affect them. A custodial agency is mainly responsible for safekeeping and handling assets or records on behalf of someone else, typically following explicit instructions rather than making independent, benefit-focused decisions. Because fiduciary duties arise from that kind of discretionary, loyalty-based relationship, a custodial agency does not automatically carry fiduciary capacity. Therefore, the statement that fits best is that it does not have fiduciary capacity. If a custodial role were given broad discretionary power to manage assets, it could become fiduciary, but in the ordinary custodial arrangement it is not.