How a Custodian Nomination Works
Planning for a minor's inheritance means more than just naming them in a document. Someone needs to manage that property until the minor grows up. This statute gives you a simple way to name that person under the UTMA.
A person having the right to designate the recipient of property transferable on the occurrence of a future event may revocably nominate a custodian to receive the property for a minor beneficiary on the occurrence of the event by naming the custodian followed in substance by the words, "as custodian for (name of minor) under the Arizona uniform transfers to minors act."
A.R.S. § 14-7653(A)You can place the nomination in a will, trust, deed, or beneficiary form filed with a financial institution. You can also name backup custodians who step in if your first choice cannot serve.
This applies to many types of property. For example, it covers real estate, bank accounts, and investment holdings.
When the Nomination Takes Effect
Naming a custodian does not create custodial property right away. The nomination can be changed until the document becomes final or the transfer is completed.
The nomination of a custodian pursuant to this section does not create custodial property until the nominating instrument becomes irrevocable or a transfer to the nominated custodian is completed pursuant to section 14-7659.
A.R.S. § 14-7653(C)This means you keep full control while the document can still be changed. Once it becomes final, such as at death for a will, the custodian steps in.
Setting Up a UTMA Account
Start by choosing the right custodian and naming them in the proper document. For families with minor children, this keeps assets in trusted hands instead of leaving it to a court.
The custodian takes on the duty to manage, invest, and use the property for the minor. Naming both a primary and a backup custodian is a smart safeguard.