Two Paths to Resignation
Arizona gives trustees two ways to step down. The first requires no court involvement: the trustee provides at least thirty days' written notice to the qualified beneficiaries, the settlor (if still living), and any cotrustees. The trust instrument can modify this process, but the default is straightforward.
A trustee may resign either: 1. Unless the trust instrument provides otherwise, on at least thirty days' notice to the qualified beneficiaries, the settlor, if living, and all cotrustees. 2. With the approval of the court.
A.R.S. § 14-10705(A)The second path involves asking the court for approval. This route is more common when the resignation is contentious, when trust property needs protection during the transition, or when there is no obvious successor trustee ready to take over.
Liability Does Not End at Resignation
Stepping down as trustee does not wipe the slate clean. Any liability for actions or omissions that occurred while the trustee was serving remains in place after the resignation takes effect.
Any liability of a resigning trustee or of any sureties on the trustee's bond for acts or omissions of the trustee is not discharged or affected by the trustee's resignation.
A.R.S. § 14-10705(C)This matters for beneficiaries. If a trustee mismanaged trust assets before resigning, the resignation itself does not shield them from accountability. And for trustees considering stepping down, it is a reminder that the role carries lasting responsibility for the period of service.
