The Transition Period
Resignation or removal does not end a trustee's duties overnight. The outgoing trustee stays responsible for protecting trust property until it reaches the right person. This means there is no gap where assets could be lost or mismanaged.
Unless the trust instrument says otherwise, the former trustee must keep informing the beneficiaries during this transition. This duty does not vanish just because the trustee is stepping down.
Unless a cotrustee remains in office or the court otherwise orders, and until the trust property is delivered to a successor trustee or other person entitled to it, a trustee who has resigned or been removed has the duties of a trustee and the powers necessary to protect the trust property.
A.R.S. § 14-10707(A)If a cotrustee is still serving, the former trustee's continuing duties may not apply. Otherwise, the former trustee stays on the hook until the handoff is complete.
The Duty to Act Quickly
The statute requires the former trustee to deliver trust property quickly. This covers accounts, real property, records, and any income or principal they hold.
A trustee who has resigned or been removed shall proceed expeditiously to deliver the trust property in the trustee's possession to the cotrustee, successor trustee or other person entitled to it.
A.R.S. § 14-10707(B)This matters for beneficiaries waiting on a transition. A former trustee who delays delivering accounts or property could face legal consequences. The word "expeditiously" gives courts a clear standard to enforce.
What This Means for Families
For a revocable trust, the transition may be simpler because the settlor can direct it. For an irrevocable trust, the outgoing trustee must coordinate with the successor. Nothing should fall through the cracks.
Informed beneficiaries can hold both the outgoing and incoming trustee accountable. If a former trustee fails to deliver trust property on time, the court can step in. The beneficiaries or the successor trustee can file the request.