Final answer:
Upon the death of the minor beneficiary, the assets in a custodial account become part of the minor's estate and pass according to state inheritance laws or the minor's will. The custodian should consult legal advice to understand specific implications as the handling of these accounts can vary by jurisdiction.
Step-by-step explanation:
What happens to the contents of a custodial account in the event of the death of the beneficial owner (the minor child) depends on the rules set forth by the state law governing the custodial account and the account documents themselves. Typically, the assets in a custodial account would be part of the minor’s estate and would pass according to state inheritance laws or the minor's will if one exists. It is important for the custodian of the account to check the account documentation and consult with a legal professional to understand the specific implications in their jurisdiction. If no specific successor custodian is named, the court may appoint one. The handling of such accounts can vary widely, so professional legal advice is often needed to ensure compliance with relevant laws.