What Creates a Vacancy
A trusteeship becomes vacant for several straightforward reasons. The named trustee may reject the appointment, resign, be removed, die, or become incapacitated to the point where a guardian or conservator is appointed. A vacancy also occurs when the person designated as trustee simply cannot be identified or does not exist.
A vacancy in a trusteeship occurs if: 1. A person designated as trustee rejects the trusteeship. 2. A person designated as trustee cannot be identified or does not exist. 3. A trustee resigns. 4. A trustee is disqualified or removed. 5. A trustee dies. 6. A guardian or conservator is appointed for an individual serving as trustee.
A.R.S. § 14-10704(A)If one or more cotrustees are still serving, the vacancy does not need to be filled. The remaining cotrustees continue managing the trust. But if no trustee remains, the vacancy must be filled to keep the trust running.
How the Successor Is Chosen
For noncharitable trusts, there is a three-step priority. First, the trust instrument controls. If the trust names a successor or gives someone authority to appoint one, that person steps in. Second, if the trust is silent, all qualified beneficiaries can agree on a replacement. Third, if neither option works, the court appoints someone.
Charitable trusts follow a slightly different order. The trust instrument still comes first, but the next step involves the designated charitable organizations rather than individual beneficiaries.
Whether or not a vacancy in a trusteeship exists or is required to be filled, the court may appoint an additional trustee or special fiduciary whenever the court considers the appointment necessary for the administration of the trust.
A.R.S. § 14-10704(E)This is one of the strongest reasons to name a successor trustee in the trust document itself. Without that designation, filling a vacancy becomes more complicated and may require court involvement, costing the trust time and money.