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.