Residential custody is the parent who has physical custody of a child. This type of custody only deals with where the child is living. Legal custody refers to the decision-making aspect of custody. When discussing legal custody there are certain types of decisions that are considered major decisions, such as education, medical, religion and extracurricular activities. These decisions have to be made by the parents. Either the parents will agree as to how residential and legal custody arrangements will be or the parties will go to trial and have a judge decide.