MARVIN MANDEL, Governor                          125

pensation for his services the fees that are customarily allowed in
this State to trustees, unless the donor directs otherwise when the
gift is made.

(d)    Bond.—Except as otherwise provided in this subtitle, a cus-
todian shall not be required to give a bond or FOR the performance of
his duties.

(e)    Liability for losses.—A custodian not compensated for his
services is not liable for losses to the custodial property unless they
result from his bad faith, intentional wrongdoing or gross negligence
or from his failure to maintain the standard of prudence in investing
the custodial property provided in this subtitle.

306.    Exemption of third persons from liability.

No issuer, transfer agent, bank, life insurance company, broker or
other person or financial institution acting on the instructions of or
otherwise dealing with any person purporting to act as a donor or
in the capacity of a custodian is responsible for determining whether
the person designated as custodian by the purported donor or by the
custodian or purporting to act as custodian has been duly desig-
nated or whether any purchase, sale or transfer to or by or any other
act of any person purporting to act in the capacity of custodian is
in accordance with or authorized by this subtitle, or is obliged to in-
quire into the validity or propriety under this subtitle of any instru-
ment or instructions executed or given by a person purporting to act
as a donor or in the capacity of a custodian, or is bound to see to the
application by any person purporting to act in the capacity of a cus-
todian of any money or other property paid or delivered to him.

307.    Resignation, death or incapacity of custodian; successor cus-
todian; bond.

(a)    Eligibility to become successor custodian; manner of desig-
nating successor custodian; powers, etc., of successor custodian.—
Any adult or trust company eligible to become a custodian shall also
be eligible to become successor custodian. A custodian may desig-
nate his successor by executing and dating an instrument of desig-
nation before a subscribing witness other than the successor; the in-
strument of designation may but need not contain the resignation
of the custodian. A successor custodian has all the rights, powers,
duties and immunities of a custodian designated in a manner pre-
scribed by this subtitle.

(b)    When designation takes effect.—The designation of a suc-
cessor custodian as provided in subsection (a) takes effect as to each
item of the custodial property when the custodian resigns, dies or
becomes legally incapacitated and the custodian or his legal repre-
sentative:

(1)    Causes the item, if it is a security in registered form, a life
insurance policy or annuity contract, or an interest in real property,
to be registered in the name of or conveyed to the successor custodian
followed, in substa